State-run Petrobangla has decided to import at least seven additional LNG cargoes annually-preferably from the spot market-using the proceeds from the recent tariff hike in order to feed the gas-starved fertilizer factories.
"We'll include the plan for additional liquefied natural gas (LNG) cargo import in the Annual Delivery Programme (ADP) for 2026," Petrobangla Chairman Md Rezanur Rahman told The Financial Express on Tuesday. The additional LNG imports are intended to ensure increased gas supply to fertilizer factories, which have faced repeated shutdowns due to chronic gas shortage, he said.
The Bangladesh Energy Regulatory Commission (BERC) has increased the natural gas tariff for fertilizer factories by 82.81 per cent to Tk 29.25 per cubic metre, effective from December 1. The commission raised the tariff following a public hearing on October 6 over proposals from Petrobangla and its subsidiary gas marketing and distribution companies, which had sought a 150 per cent hike -- from Tk 16 per cubic metre to Tk 40.
In the proposals, Petrobangla and its subsidiary companies stated that the tariff increase was aimed at financing the import of additional LNG to cope with its persistent supply shortfall. According to Petrobangla, the revised tariff would enable it to supply 250 million cubic feet per day (mmcfd) of gas during the peak fertilizer production season between October and March, 165 mmcfd between April and May, 175 mmcfd in June, and 130 mmcfd between July and September.
Bangladesh has half a dozen fertilizer factories, which currently receive around 135 mmcfd of gas on average, which is hampering fertilizer production and the country's agricultural output. But the combined gas requirement for these factories is
around 194 mmcfd. The increased tariff will enable Petrobangla to raise its annual LNG imports to 115 cargoes, up 6.48 per cent from the existing 108.
"With the increased tariff, we are aiming to generate additional revenue of around TK 20.34 billion annually," Petrobangla's Director for Finance Md Mizanur Rahman said. Petrobangla expects to receive additional funds, if required, through government subsidies to support the increased LNG imports, he said, adding that Petrobangla has been receiving around Tk 60 billion in government subsidies and Tk 1.07 billion from energy security fund to import LNG from global suppliers during the fiscal year 2025-26, Rahman said.
State-run Bangladesh Chemical Industries Corporation (BCIC) plans to raise domestic fertilizer production by around 63 per cent to around 1.8 million tonne per year with the increased and uninterrupted supply of natural gas, BCIC's Director for Planning and Implementation, Md Delwar Hossain, said. This would reduce the country's dependence on fertilizer imports, he said.
Azizjst@yahoo.com
