Prioritise gas supply to fertiliser plants

It is difficult to understand how long the current practice of leaving fertiliser plants starved of gas can continue. The irony of this practice is that it either harms the domestic farming sector or increases the country's dependence on imported fertiliser. If we want to keep local fertiliser factories running and produce essential agricultural inputs ourselves, these plants will need more gas (in the form of LNG) sourced from abroad. If not, the country will be forced to import fertiliser from foreign sources, and any supply chain disruption will also mean importing more food from abroad.

There is no doubt that Bangladesh is facing gas shortages because of its failure to give sufficient priority to the exploration of new wells and extraction. Importing LNG, originally meant to be a short-term measure to manage emergency shortages, has instead persisted and increased dramatically over time, as most of our power plants also depend on natural gas.

Volatility in the international energy market, owing to heightened geopolitical tensions and instability, indicates that gas prices are unlikely to come down soon. A 2022 study by the Centre for Policy Dialogue (CPD) showed that imported LNG was 24 times more expensive than locally produced gas. Yet, over the past three years, no significant steps have been taken by the authorities to accelerate exploration activity or add newly discovered gas to the supply grid. According to a Bonik Barta report, only 18 wells were dug out of the planned 50; due to a lack of progress in laying pipelines, about 120 million cubic feet (mcf) of extractable gas could not be supplied to the national grid.

Activists have long alleged that cronies of the previous regime lobbied successfully to push the country towards greater dependence on LNG imports. So, one would have thought that, following the fall of that regime in August 2024, the state policy would shift towards reducing costly LNG dependence and increasing domestic gas production. Unfortunately, the present government seems inclined to continue with the old arrangements.

Even more worrying is the move to raise gas prices for fertiliser plants. Following a request from Petrobangla, the Bangladesh Energy Regulatory Commission (BERC)—the energy market regulator—has, pending a final decision after public consultation, recommended raising the gas price from Tk 16 to Tk 30 per cubic metre. We cannot but agree with Consumers Association of Bangladesh (CAB) adviser M Shamsul Alam that this price hike will increase farming costs and undermine food security.

It is worth noting here that while the textile sector has long enjoyed priority in receiving uninterrupted gas supply, the farming sector has become increasingly dependent on imported fertiliser due to shortages of gas for domestic fertiliser plants. This is not a sustainable model, and these policies must be reviewed and adjusted with prudence.