Fuel price and dollar crisis: Nasrul highlights challenges in ensuring energy supply

High fuel prices on the international market amid a dollar crisis in Bangladesh have put the government in a tight spot, the state minister says

High fuel prices on the international market, coupled with a dollar crunch in Bangladesh, have put the country’s energy sector in a tight spot, Nasrul Hamid has said.

And it is not certain how the energy crisis will turn with the ripple effects of the war in Europe after the coronavirus pandemic still battering the global economy, the state minister for power, energy and mineral resources said on Monday.

“The global context has put the power and energy sector in a challenging position, especially the undisrupted supply of primary fuel, although transmission and distribution are going on as planned,” he said at a dialogue on the challenges facing investors in the energy sector and their expectations.

“After two years of COVID, the Ukraine war has affected the global energy sector heavily. It can’t be said where the crisis will be headed in future.”

Nasrul talked about how the government’s plans to supply power without any disruptions with the establishment of big plants were hit by the global fuel price hike.

“When our coal-based power plants became operational, coal prices increased to $400 from $60. For gas, the hike was from $7 to $67. Oil prices also hit $160 once. These have created a huge gap in the supply chain in the past one year, and we’re feeling the effects of this gap now,” he said.

Speaking about the dollar crisis, which has hampered the purchase of coal for large power plants, Nasrul said, “The entire world is facing a foreign currency crisis, an economic crisis. Our country is no exception. We have power plants, transmission lines, everything, but a shortage of fuel.”

He said extracting gas from Bangladesh’s reserves and producing solar power can ease the energy crisis, but Bangladesh does not have enough funds or infertile land for such projects.

“Still, we’ve taken drastic measures to increase solar power capacity to 2,000 MW in two years,” he said.

Mozammel Hossain, a vice-president of the Independent Power Producers Association, said they owe the Power Development Board Tk 180 billion.

“The private power stations supported us in bad times. They will get their bills, today or tomorrow,” Nasrul said.