Local think-tank South Asian Network on Economic Modelling (SANEM) has expressed its reservation on the building of new LNG infrastructure as higher global LNG prices have already affected Bangladesh's economy.
It also raised question over the government initiatives on boosting power- generation capacity by 9,144MWs setting up 27 more power plants despite having overcapacity in the country now.
"Insufficient fuel reserve, specifically natural gas, since significant number of power plants are gas-fired, has created a crying need of having stable and alternative energy sources," it said in "Observation for the National Budget 2024-25 on the Power and Energy Sector."
SANEM calls for a strategic approach to managing the budget allocation in the energy sector, focusing on increasing the share of renewable-energy projects, exploring domestic natural gas, managing the impact of currency devaluation, and addressing the subsidy burden through efficient policy measures.
Since the budget share for the energy sector within the total power and energy sector budget has been decreasing, it recommends increasing this allocation substantially through a press release on Tuesday.
"The revised ADP data reveals a continuous decline in the budget allocation for the Power and Energy Sector and the Energy and Mineral Resources Division (EMRD) since FY 2021-22 which necessitates a reassessment."
In the next year's Tk 7.97-trillion budget, the energy and power sector secured only 3.8 per cent of the total budget. In the FY 2023-24, the budget share was 4.6 per cent, representing a significant 12.9-percent reduction for the upcoming FY2025.
SANEM laid emphasis on diversification of the energy sources and exploration of renewable potential.
Changing the proportion of ADP and subsidy for Power Division and EMRD having specific focus on renewable energy could contribute to the energy security of the whole power and energy sector of the country, it added.
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