Tuku takes charge amid mounting crisis

The Ministry of Power, Energy and Mineral Resources has embarked on a challenging new chapter under the leadership of Iqbal Hasan Mahmud Tuku, who assumes office at a time when Bangladesh's energy sector is grappling with deep-rooted financial, operational and geopolitical pressures.

* Tk 40,000cr outstanding liabilities in the power sector
* Daily gas shortfall of 1,743 mmcfd against growing demand
* Domestic gas production declining by 150 mmcfd annually
* Power subsidies hit Tk 68,000 crore amid delayed tariff reforms
* LPG market under pressure from strong syndicates and 12pc annual growth in imports

As the 54th individual to hold the ministerial portfolio, Tuku returns to a ministry where he previously served as state minister. This time, however, he describes the responsibility as "a huge challenge" amid mounting crises across the sector. The power sector is burdened with Tk 40,000 crore in outstanding liabilities, a daily gas shortage of 1,743 mmcfd, declining domestic production and what he termed a strong syndicate presence in the LPG market.

"Gas production is decreasing by 150 mmcfd per year. System loss at Titas Gas stands around 10 percent, which translates to Tk 6,000 to Tk 10,000 crore considering LNG prices. The LPG business is facing serious disruption due to syndicates, and geopolitical issues are also a factor. On top of that, the liquidity crisis remains a major concern," Tuku told The Daily Observer.

Rising Demand, Shrinking Supply
Pressure is expected to intensify in the coming weeks as electricity demand rises during Ramadan, the irrigation season and the peak summer months. The Power Division has already outlined five major challenges to the minister, following directives from Tarique Rahman to ensure uninterrupted electricity supply during Ramadan and the upcoming summer.

At his first official meeting on Wednesday, Power Division Secretary Farzana Momtaz presented the key concerns of the Bangladesh Power Development Board.

The most pressing concern is the acute shortage of natural gas. BPDB currently receives less than 850 mmcfd, far below the minimum requirement of 1,200 mmcfd during peak summer demand. As a result, gas-fired generation is projected at only 4,900 MW despite an installed capacity of 12,204 MW, creating a significant gap between capacity and actual output. The division has also sought timely subsidy payments for joint venture power plants to facilitate coal imports and maintain stable electricity production.

Mounting Financial Burden
Officials expressed alarm over the growing subsidy burden, which has reached Tk 68,000 crore. The interim administration refrained from revising tariffs despite mounting generation costs. During a recent review by the International Monetary Fund, officials indicated that a politically elected government would need to take a decision on tariff adjustments to ease the subsidy pressure.

Another major challenge is the recovery of significant outstanding electricity bills from public and private sector entities, which has further strained liquidity in the system. Uncertainty also surrounds the timely supply of electricity from the Rooppur Nuclear Power Plant, adding to operational concerns.

Domestic Gas Production in Steady Decline
The Energy Division informed the minister that gas supply from national and international oil company wells is steadily declining. Currently, Petrobangla is supplying 2,600 mmcfd against a demand of 3,800 mmcfd, leaving a wide deficit in the national grid.

Domestic production has shown a consistent downward trend. In 2023, output stood at 2,132 mmcfd. In 2024, it declined to 1,986 mmcfd, and it has now dropped further to 1,819 mmcfd per day. LNG imports contribute between 650 and 850 mmcfd daily, but officials say there is limited scope to significantly expand supply beyond this level.

Managing Peak Demand
To curb peak summer demand, the Power Division has proposed a range of demand-side measures. These include ensuring a minimum gas supply of 1,200 mmcfd to off-grid plants, setting air conditioning units at 25°C or above, and restricting irrigation pumps during peak evening hours. Officials believe that if irrigation loads can be shifted to midnight and early morning hours, evening peak demand could be reduced by up to 2,000 MW. Additional measures under consideration include closing CNG filling stations during evening peaks, encouraging consumers to limit electricity use during peak periods, promoting energy-efficient irrigation practices and expanding the Agriculture Ministry's Alternate Wetting and Drying method to conserve both electricity and water.

LPG Market Under Strain
The government has limited direct control over the LPG market, where strong syndicates are alleged to influence pricing and distribution. Bangladesh currently imports around 1.8 million metric tonnes of LPG annually, with demand growing at 12 percent per year. This rapid growth, combined with market dynamics, has added further pressure on kitchen gas supply stability.

With declining domestic gas reserves, soaring subsidies, rising liabilities and increasing seasonal demand, the new minister faces a defining test. Stabilising the energy sector will be critical not only for ensuring uninterrupted power during Ramadan and summer, but also for safeguarding Bangladesh's broader economic recovery and growth trajectory.