The Russian invasion of Ukraine has created a war situation across the world. And many countries are taking up various measures which are like war-time actions.
We may also have to undertake such proactive initiatives through which the economic growth and the livelihood of the people will be protected.
If the Ukraine-Russia war lasts for a long time, the whole world will have to suffer. Already, the United States administration is under tremendous pressure as the price of one gallon of gasoline has risen to $5. Prices of oil have increased in all countries, including the European nations.
This is a new normal for the oil and gas market and it is quite difficult to predict how the market will be in the coming days and what we should do.
But, my assumption is that if the Russia-Ukraine war prolongs, the oil supply will come from Iran, Venezuela, and Saudi Arabia, which have the capacity to produce additional oil. Probably, we will not go back to the pre-war prices, but the rates will definitely not stick at the current level. The prices will drop even if the war continues for another three to four months.
Besides the transport sector, power plants are one of the biggest consumers of fuel oil in Bangladesh.
It is good news that some large coal-fired power plants are coming into operation in a few months. For instance, the Rampal 1,320MW plant will be operational next year while the one in Payra will supply to its full capacity once the transmission line crosses the River Padma.
In the next one and a half years, we would be able to close several oil-fired power plants having a total capacity of around 1,500MW to 2,000MW, which will help us reduce the dependency on oil for power generation.
We need to increase the number of trains by reducing the number of personal vehicles to accommodate a large number of people. To reduce oil consumption, we also have to manage the mass transit facilities such as metro rail.
Apart from this, unnecessary travels have to be stopped, which is a civic responsibility.
Use of personal vehicles will come down automatically if oil prices are hiked, as in western countries the number of trips has reportedly dropped following such measures. They are not opting for a trip unless it is urgent and unavoidable. So, we need to encourage people to reduce the use of oil.
Secondly, we need to develop our own energy resources as much as we can, though we cannot be fully self-dependent.
Petrobangla has taken an initiative to increase gas production from its own fields and claimed that it would be able to add additional 600mmcf gas by 2025.
Such activities need to be expedited to become self-dependent on energy. It would be a big support even if we can produce half of the target from our own fields.
Thirdly, we need to emphasise renewable energy as much as we can harness it from different sources even if it is a very small amount.
At present, the Bangladesh Power Development Board has imposed a cap on supplying supplementary solar energy to the national grid by the consumers. We need to remove the limitations of the rooftop and net metering projects.
Apart from this, gas conservation by efficient use in factories and power plants is important to reduce greenhouse gas emissions and consumption.
Liquefied Natural Gas (LNG) has become a field of competition as Europe and America are rushing to the LNG.
Big countries such as China and some European countries are booking in advance for all LNG facilities that are expected to come into operation in the future.
It would be difficult to have some long-term LNG supply contracts right this moment.
But, we need to continue imports under the existing two contracts with Qatar and Oman, need to explore other markets, and have to try to increase the number of long-term import contracts if possible.
Dr M Tamim spoke to TBS Staff Correspondent Eyamin Sajid over the phone