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Fuel shortage to worsen power situation further - EN-vinnabarta

Fuel shortage to worsen power situation further

Vinnabarta Desk
  • Update Time : Sunday, October 9, 2022
  • 74 Time View

The global energy crisis has left two choices for overwhelmingly import-dependent Bangladesh — either to increase its fuel oil import or live with the crippling electricity crisis for quite a while.

After the long-term liquefied natural gas supply dropped to the obligated minimum amount and being priced out of the spot LNG market, the country has now no choice but to increase fuel oil use for coping with its current electricity crisis.

Energy experts said that they saw no hope of a better power situation in the country anytime soon.

‘The likely scenario is that power shortage will exist through the upcoming winter as the energy crisis is unlikely to improve by then,’ said M Shamsul Alam , energy adviser, Consumers Association of Bangladesh.

After the grid failed on October 4 as some gas-fired power plants suddenly went out of order, the consumption of diesel and furnace oil has increased by 84 per cent and 171 per cent respectively, compared to the average daily use of the fuel oils the month before.

The use of fuel oil was in a rising trend even before the national eastern grid failed as hotter and drier October days led to an increased power demand compared with a month ago.

The overall use of all fuel oils — diesel, furnace oil, petrol, octane and kerosene — in the first five days of the month went up by up to 100 per cent compared with the same period in 2021, according to Bangladesh Petroleum Corporation data.

‘Economic circumstances will not allow Bangladesh to ramp up power generation by increasing fuel oil import,’ said Shamsul Alam.

Prices of fuel oils on the international market rather may go up with the Russia and Ukraine war continuing to rage and the Opec+ dropping their production, experts explained.

The stock of furnace oil, mostly used in electricity generation, dropped to 43 per cent following a threefold increase in its consumption on the day of grid failure, the BPC data until October 6 showed.

The furnace oil storage capacity in the country is 1,50,665 tonnes. A total of 50,000 tonnes of furnace oil is in the import pipeline for October.

According to the BPC data, Bangladesh had more than 98 per cent of its 6,04,495 tonnes of diesel storage capacity filled, with an average consumption of 12,495 tonnes a day, over the first five days of the month.

More than a fifth of the diesel consumed is used for power generation.

Furnace oil accounts for 28 per cent of the installed power generation capacity while diesel for 6 per cent. Bangladesh’s installed capacity is over 25,700MW.

On October 7, Power Grid Company of Bangladesh data showed that furnace oil and diesel produced about roughly 3,000MW out of the 11,567MW electricity generated on the day, recording a 964MW shortage.

During winter, the average peak electricity demand is expected to drop to 11,000MW.

Bangladesh is unlikely to produce more than 1,000MW from coal until fresh coal capacity is added in December.

The gas-power generation is likely to hover around 5000MW as the current gas supply for power generation is unlikely to improve until next January, according to sources at Rupantarita Prakritik Gas Company Limited and Petrobangla.

The LNG supply dropped to just 381mmcfd, a third of the capacity, on October 7.

‘The LNG crisis deepened as Bangladesh could not secure the maximum cargoes ensured under long-term contracts,’ he said.

Long-term LNG import contracts entitle Bangladesh to at least 56 cargoes from Qatar and Oman, according to RPGCL officials.

The contracts allow access to maximum 64 cargoes which Bangladesh failed to get, they said.

RPGCL officials said that the government had planned to source most of its LNG needs from the spot market at the end of the year.

The LNG price more than quadrupled since Bangladesh started importing it from the spot market in 2020. The crude oil price also quadrupled over the same period with a prediction of it rising up to $110 per barrel next year from the current price of $98.

The coal price shot up more than five times since 2020 as well, according to the Trading Economics, with projection of it further inflating next year.

The energy crisis is rather likely to get acute in other sectors in the country too in the coming months with the kerosene oil stock dropping to just 36 per cent of its storage capacity.

Bangladesh had 14,861 tonnes of kerosene in stock against a storage capacity of 41,733 tonnes. No kerosene is in the import pipeline this month.

The octane stock fell to 59 per cent of its storage capacity of 45,819 tonnes while the petrol stock declined to 70 per cent of its storage capacity of 31,885 tonnes.

Bangladesh Petroleum Corporation chair ABM Azad refused to comment on the matter of fuel oil stocks when contacted by phone.

‘I cannot readily recall all those data and I am in Barishal now,’ said Azad.

The cause of the power grid failure that paralysed four divisions, including Dhaka, for up to 10 hours could not be known until Saturday.

The probe body formed by the Power Grid Company of Bangladesh missed a deadline to find out the reason.

The prime minister recently indicated that the electricity situation would worsen in the coming days.

An-hour of area-wise rolling power outage introduced on July 19 has already gone up to five hours, even in the capital Dhaka.

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