Bangladesh has closed educational institutions and reduced the use of air conditioning and lighting in government offices in a worsening energy crisis linked to the US-Israeli war with Iran and the closure of vital oil and gas routes from the Middle East.
A country of 170 million people that relies on imports for 95 percent of its energy needs, Bangladesh has for years been vulnerable to disruptions in global energy markets.
Oil and natural gas prices have been rising since the start of the US-Israeli attack on Iran last week, which triggered Iranian retaliatory attacks on American-linked assets across the Gulf region and the closure of the Strait of Hormuz.
Bangladeshi authorities almost immediately began implementing austerity measures, including rationing fuel at gas stations, ordering educational institutions to start Eid al-Fitr holidays ahead of schedule, and government offices to minimize energy consumption.
"The prime minister has started using half the lights in his office. He does not turn on the air conditioner unless it is urgent. This austerity measure is being practiced in all offices across the country," Saleh Shibly, press secretary to Prime Minister Tarique Rahman, told Arab News on Tuesday.
"This action has been taken as a precautionary measure in case the global energy situation deteriorates further due to the ongoing war in the Middle East."
The measures could provide immediate relief if they could be implemented across the country, as during the summer – from March to June – air conditioning use consumes more than 2,000 megawatts of electricity.
“The government needs to build consensus so that people understand that each of them can contribute to this energy conservation,” said Prof. Abdul Hasib Chowdhury from the Bangladesh University of Engineering and Technology.
But energy conservation can only help immediately, he said, as the Iran war highlighted the fact that Bangladesh has no strategic energy reserves – an issue that the prime minister and the government, which took office only last month, will have to address during their term.
“Bangladesh needs to build a strategic energy reserve — primary fuel for thermal power plants, as well as for industry. It should have between three and six months of energy reserves,” Chowdhury said. “It will take years of planning and work to build these reserves. However, Bangladesh must do it.”
Oil prices have risen by about 50 percent since the US and Israel launched joint strikes on Iran on February 28, with Brent crude, the international benchmark, crossing $119 a barrel on Sunday.
For Bangladesh, every $10 increase in global fuel prices increases the monthly import bill by approximately $80 million, according to BRAC EPL, one of the country's leading stockbrokers.
While the effect will not be felt immediately, especially after the government announced on Tuesday that it had no plans to raise fuel or electricity prices, Bangladeshis are likely to experience a crisis in the long term.
"It's more like a looming crisis because any shortage in supply takes some time to show up. So agriculture will be affected, but that will only be understood after a few months," Chowdhury said.
“It will affect transportation and, because of that, the main food supply, which would increase inflation… It is not a crisis as such at the moment, but it will be.”
