To prevent an impending energy crisis this summer, private power producers in Bangladesh have requested $1 billion in foreign currency from the nation’s central bank. They plan to use the funds to import heavy fuel oil, as reported by Bloomberg.
Buying gasoline
The companies are looking for the banks to furnish them with dollars so they may issue letters of credit to buy gasoline from abroad, according to a letter the industry lobbying group, Bangladesh Independent Power Producers’ Association, sent to the central bank on Monday. From March through June, the private generators would require around $250 million a month to pay for the cargo.
The need comes as summer has arrived early in some areas of the region, requiring authorities and business organisations to take action to prevent blackouts when temperatures rise. The South Asian country’s second-largest source of energy after natural gas, heavy fuel oil, often known as bunker fuel, supplies a quarter of its electricity.
High fuel prices
Bangladesh’s economic difficulties have been exacerbated by high fuel prices and a reliance on imports, which jeopardises the country’s energy security. In order to irrigate the rice fields during the dry season and assist assure the country’s major staple grain supply, adequate electricity supplies would be essential.
According to the organisation, throughout the course of the four summer months, private electricity producers—who generate up to 45% of the country’s electricity—will need to import around 2.12 million tonnes of the fuel.
While goods would take 40–45 days to arrive, there is a pressing need to place shipment orders, according to Faisal Khan, head of the 46-member association.
Examining power producers
Besides irrigation, high temperatures are also likely to stimulate demand for power as citizens and companies increase the usage of cooling appliances.
“Bangladesh Bank is putting money into the market almost every day as needed.” The central bank will examine the power producers’ letter and determine whether their request is in accordance with the government’s current priorities, according to Mezbaul Haque, a spokesman for the central bank, in a phone interview.
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Source: Bloomberg
