Power and Energy Dilemma: Seeking solutions amidst cash crunch

In the latest revelation about Bangladesh’s power and energy sectors, the country is grappling with a severe cash crunch, particularly in the form of the US dollar.

Official sources have disclosed that the cumulative outstanding bills have skyrocketed to a staggering $5 billion, with $4 billion bogging down the power sector and the remaining $1 billion burdening the energy sector.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid candidly acknowledged the gravity of the crisis, emphasizing that the main culprit is the scarcity of the US dollar.

The power and energy sectors require a minimum of $1 billion monthly to fulfill payment obligations.

However, the grim reality is that they are receiving less than half of this amount, leading to a monthly escalation of outstanding debts.

This predicament is particularly troubling given the essential role these sectors play in driving economic activities and sustaining the nation’s growth trajectory.


Sources have traced the root of the problem to the significant expenses incurred by state-owned organizations in the energy sector, namely Petrobangla and Bangladesh Petroleum Corporations, for importing primary fuels such as crude oil, refined petroleum, and liquefied natural gas (LNG) from abroad.

The situation is exacerbated by the necessity to pay foreign gas companies, including major players like Chevron, in foreign currencies.

The Bangladesh Power Development Board (BPDB) faces a similar quandary, as it must purchase electricity from independent power producers (IPPs) in dollars.

As officials scramble to find solutions, negotiations with the Bangladesh Bank have yielded limited success. Suggestions to increase the prices of electricity, gas, and petroleum have been proposed, but the feasibility of such a move in a politically charged environment remains questionable.

Urgent and collaborative efforts are required from the government, financial institutions, and stakeholders to navigate these turbulent waters and secure the stability of these crucial sectors for the nation’s prosperity.

The challenge lies not just in managing the immediate crisis but in developing long-term strategies to ensure resilience and sustainability in the face of economic uncertainties.