The adviser says Bangladesh is looking to strike a long-term deal with Qatar to buy gas at a lower price than in the spot market
Published : 27 Aug 2022, 09:35 PM
Salman F Rahman, the prime minister’s adviser for private industry and investment, has warned of an impending gas crisis if the prices in the international market do not go down in six months.
Everyone might be talking about fuel oil as the prices of heavy fuel oil needed to generate power and diesel are surging, but Bangladesh still has places from where it can import those, said Salman.
“But the biggest issue at this moment is gas,” he added, noting that “about 70-80 percent” of Bangladesh’s electricity is generated by gas-based power plants.
The prices of liquefied natural gas are so high on the spot market that “it's becoming tough for us to afford it”, he said, speaking to members of the Overseas Correspondents Association of Bangladesh on Saturday.
“Actually we are mostly looking for an alternative to gas.”
Salman said the largest reserve of gas was found in the southern district of Bhola, but it will be difficult to bring the gas to the mainland from the island district. The government is carrying out a feasibility study about how to bring gas to the mainland.
He mentioned government efforts to import gas at lower prices amid the global crisis triggered by the Russia-Ukraine war. Many countries, especially in Europe, have increased gas purchases from sources that are generally used by countries in Asia.
Salman said the government is now trying to enter a long-term agreement with Qatar for LNG at lower prices than in the spot market. “We can also try India.”
He noted that Bangladesh cannot refine Russian crude oil as the state-owned Eastern Refinery Ltd, the only petroleum refinery in the country, processes Arabian light crude oil. The government has recently started talks to import refined oil from Russia
Salman said there will be “no problem” to import refined oil from Russia by making payments through the 24 banks on which the West has not imposed sanctions over the Ukraine war.
He also said the government is trying to ease the dollar shortage by using other currencies, such as the euro and Indian rupee from its reserves.