DHAKA: Bangladesh has closed educational institutions and slashed the use of air conditioning and lighting at government offices in a worsening energy crisis linked to the US-Israeli war with Iran and the closure of vital oil and gas routes from the Middle East.
A country of 170 million people, which relies on imports for 95 percent of its energy needs, Bangladesh has for years been vulnerable to disruptions in global energy markets.
Oil and natural gas prices have been soaring since the beginning of the US-Israeli attack on Iran last week, which triggered Iranian retaliatory strikes on American-linked assets across the Gulf region and the closure of the Strait of Hormuz.
Bangladeshi authorities almost immediately started implementing austerity measures, including fuel rationing at gas stations, ordering educational institutions to begin their Eid Al-Fitr holidays ahead of schedule, and government offices to minimize power consumption.
“The prime minister has already started using half of the lights at his office. He does not turn on air conditioning unless it’s urgent. This austerity is being practiced at all offices across the country,” Saleh Shibly, press secretary to Prime Minister Tarique Rahman, told Arab News on Tuesday.
“The move has been undertaken as a preventive measure in case the global energy situation deteriorates further due to the ongoing war in the Middle East.”
The measures might offer some immediate relief if they can be enforced nationwide, as during summertime — from March to June — the use of air conditioning consumes more than 2,000 megawatts of electricity.
“The government needs to build consensus so that people realize that each and every one can contribute to this energy conservation,” said Prof. Abdul Hasib Chowdhury from the Bangladesh University of Engineering and Technology.
But energy conservation could help only immediately, he said, as the Iran war brought to the spotlight the fact that Bangladesh has no strategic energy reserves — an issue that the prime minister and government, who only took office last month, will have to address during their term.
“Bangladesh needs to build a strategic reserve of energy — primary fuel for the power plants, and also for the industry. Between three and six months of energy reserves have to be here,” Chowdhury said. “This will take years of planning and work to build these reserves. Nevertheless, Bangladesh should do that.”
Oil prices have surged by about 50 percent since the US and Israel launched joint strikes on Iran on Feb. 28, with Brent crude, the international benchmark, topping $119 a barrel on Sunday.
For Bangladesh, every $10 increase in global fuel prices raises the monthly import bill by roughly $80 million, according to BRAC EPL, one of the country’s leading stockbrokers.
While the effect will not be felt immediately, especially as the government announced on Tuesday it had no plans to increase the prices of fuel or electricity, Bangladeshis are likely to experience a crisis in the longer term.
“It’s more like a looming crisis because any shortfall in supply takes a little bit of time to show. So, the agriculture will be affected, but it will be realized only after a few months,” Chowdhury said.
“It will affect transportation and, because of that, the primary food supply, which would add to inflation ... It is not a crisis as such at this moment, but it will be.”
