Hasina says Bangladesh to buy spot LNG to meet power demand in summer

The government seeks balance in supplying power to the industrial sector and average consumers

Sheikh Hasina has said the government has moved to import liquefied natural gas or LNG from the spot market to keep up with the high power demands during the irrigation season, Ramadan and oncoming summer.

The government went ahead with buying LNG at higher rates for uninterrupted supply to captive electricity generation in the export-oriented industries, the prime minister said in parliament on Wednesday.

The decision led the government to raise gas prices at industrial and commercial levels while leaving them unchanged for other consumers, she said.

In 2008, Bangladesh was capable of producing 1,744 million cubic feet of gas daily, and it rose to 2,750 million cubic feet in 2018. Still, the volume slipped to 2,300 million cubic feet at present amid the energy crunch, according to her.

The prime minister highlighted her government's success in boosting agricultural production by improving fertiliser management, delivering incentives to poor farmers amid natural disasters and developing agrarian equipment.

The government was taking steps to provide farmers with low-interest loans, low-cost fertilisers, high-quality seeds and irrigation methods, she said.

Despite the impacts of climate change and the pandemic amid a global crisis, Hasina said her government was pushing ahead with modernising the agricultural system.

The prime minister said Bangladesh was keenly observing the possibilities of a global recession in 2023 and focused on averting any dire consequences.

"We are carefully adjusting our monetary and revenue policies."

She said the government took austerity measures to keep resources flowing into productivity and social security.

She faced questions in parliament about energy and agricultural production after the government recently resumed LNG imports as prices fell in the international market. The government halted LNG purchases or eight months due to depleting reserves and high prices.

Hasina's energy Advisor Tawfiq-e-Elahi Chowdhury told Reuters on Tuesday Bangladesh will buy 10-12 spot LNG cargoes between February and June if prices soften further.

The South Asian nation depends on imported natural gas for about three-quarters of its power generation, but was forced to ration gas supplies last year as global prices were driven up by Russia's war in Ukraine.

Bangladesh currently imports about 300 million-400 million cubic feet of LNG daily through a 10-year import deal with Oman and a 15-year import deal with Qatar.