Ongoing social unrest in Bangladesh, which has forced factories and commercial establishments to close sporadically in recent weeks, is significantly reducing demand for energy and natural gas.
Petrobangla, the national energy company, has thus limited its purchases of liquefied natural gas on the spot market, according to market sources and available data.
Since the start of anti-government protests in July, consumption of gas, electricity and oil has fallen sharply.
Market players are also concerned about the long-term risks to energy supplies in this South Asian country.
Reducing electricity generation
Electricity generation in Bangladesh falls to around 11,000 MW as offices and factories close, compared with an overall generation capacity of 26,500 MW, according to the Bangladesh Power Development Board.
Natural gas supply falls to around 2.10 Bcf/d, including 600 MMcf/d of regasified LNG, from around 2.60 Bcf/d after one of the country’s two liquefied gas import terminals was taken out of service for repairs.
Impact on Natural Gas Purchases
A Bangladesh-based industry player reports that Rupantarita Prakritik Gas Co.
Ltd (RPGCL) is out of the LNG spot market due to weakened demand from current political tensions and sufficient gas supplies from long-term agreements.
RPGCL, Petrobangla’s liquefied gas supply arm, is also reducing its tendering activity due to the temporary unavailability of the FSRU Summit for repairs, which is due to be operational again on August 8.
Prime Minister resigns
Between January and May, RPGCL issued tenders for 23 spot LNG cargoes for deliveries up to June.
For July, only two tenders were issued for deliveries from July 15 to 19 and July 24 to 25, both delayed, and no tender was issued for August.
In other news, local media report the resignation of Prime Minister Sheikh Hasina and her departure from Bangladesh on August 5, accompanied by her younger sister Sheikh Rehana, for a destination in India.
The resignation was announced by Chief of Army Staff Waker-uz-Zaman after protesters stormed his official residence, according to the Dhaka Tribune.
Economic consequences
Bangladesh is experiencing waves of protests, curfews and violent crackdowns by government forces, impacting economic activity, particularly in the garment and textile mill sectors that have driven demand for electricity and gas in recent years.
Traders note that spot liquefied natural gas imports from Bangladesh are already commanding a premium due to payment risks, and this could increase if the political and social situation does not normalize quickly.
Prospects for improvement are limited as long as social unrest continues, threatening the country’s economic and energy stability.
The stakes for Bangladesh’s energy sector are therefore high, requiring both short- and long-term solutions to stabilize energy supply and demand.
