Bangladesh’s power and energy sector is approaching a decisive moment. After more than a decade of rapid electrification and headline-grabbing capacity expansion, the country is now grappling with acute gas shortages, rising subsidies, mounting foreign exchange pressure, and an increasing dependence on imported fuels. While installed power capacity has surged far beyond demand, shortages of primary energy—particularly natural gas—have exposed deep structural weaknesses in policy planning and execution.
To examine how Bangladesh arrived at this crossroads and what must be done to secure its energy future, Just Energy News Editor Md Shamim Jahangir spoke with Professor Ijaz Hossain, one of the country’s most respected energy thinkers. A former academic at Bangladesh University of Engineering and Technology (BUET) with more than four decades of teaching and research experience, Professor Hossain has long advocated for evidence-based energy policy, prudent gas management, and a strategic transition toward renewable energy. In this wide-ranging interview, he offers a candid assessment of past policy failures, warns of an impending gas crisis by 2030, and outlines a pragmatic roadmap for steering Bangladesh toward a more secure and sustainable energy system.
Interview by Md Shamim Jahangir, Editor, Just Energy News
Dhaka — Bangladesh’s power and energy sector stands at a critical juncture. Once celebrated for rapid electrification and ambitious capacity expansion, the system is now burdened by gas shortages, rising subsidies, foreign exchange pressure, and a heavy dependence on imported fuels. To understand how the country arrived at this point—and what lies ahead—Just Energy News spoke with Professor Ijaz Hossain, retired teacher, energy researcher, and former academic at Bangladesh University of Engineering and Technology (BUET).
After more than four decades of teaching and research, Professor Hossain remains one of the country’s most respected voices on sustainable energy policy.
Evaluating 15 Years of Policy Choices
Just Energy News: Professor Hossain, how do you evaluate the current state of Bangladesh’s power and energy sector? How does the performance of the past 15 years compare with the interim government’s tenure?
Prof Ijaz Hossain:
The situation is deeply troubling, particularly in the gas sector. While the power sector has its own problems, gas is where the crisis truly lies. Over the past 15 years, policy decisions—often driven by short-term political considerations—have left the energy system extremely vulnerable.
Industries are unable to operate at full capacity. Even when industrialists are willing to pay higher prices for uninterrupted gas supply, the authorities simply lack the capacity to deliver. Two major incidents related to negligence over the last decade and a half have sharply reduced domestic gas reserves. As a result, we are increasingly dependent on imported LNG, which puts immense pressure on foreign exchange reserves and undermines energy security.
Ironically, while gas is in short supply, the power sector suffers from overcapacity. Bangladesh’s peak demand is around 15,000–16,000 megawatts, yet installed capacity exceeds 30,000 megawatts. This surplus—around 70 percent more than required—has created a heavy investment burden, pushing electricity prices upward through capacity payments. These structural imbalances now weigh heavily on the economy.
A Looming Gas Crisis by 2030
Just Energy News: You have warned that Bangladesh faces a dangerous situation by 2030. Why?
Prof Ijaz Hossain:
Domestic gas reserves are declining steadily because we failed to invest in proper exploration and reserve management. As local production falls, LNG imports increase. If global LNG prices remain stable, we might manage. But the Russia–Ukraine war showed how volatile the market can be. A sharp price rise would severely damage our economy.
The way forward has three pillars: intensified exploration to assess remaining reserves, LNG imports at tolerable prices, and rapid integration of renewable energy. Alongside these, energy efficiency is critical. Reducing demand is just as important as increasing supply.
Why Reserve Management Matters
Just Energy News: You have repeatedly stressed the need for proper reserve management. Why is this so important?
Prof Ijaz Hossain:
Reserve management is fundamental. Without accurate data, foreign investors will not come. For years, we have argued that Petrobangla lacks the technical capacity to manage reserves effectively. What we need is a dedicated reserve management cell staffed with international experts.
Chevron’s success at Bibiyana shows what is possible when reservoirs are managed professionally. We must also accelerate the 50-well and 100-well drilling programmes and ensure adequate funding. BAPEX has demonstrated strong capacity in onshore areas, but in complex regions—such as the hill tracts—it should work with foreign specialists.
Deep offshore exploration remains our biggest hope. After resolving maritime disputes with Myanmar, Bangladesh gained access to deep offshore blocks. Yet progress has stalled repeatedly. Despite offering attractive terms, recent bidding rounds failed because international oil companies lacked confidence—partly due to political uncertainty. Once an elected government is in place, another tender must be launched urgently.
Within five years, we must either discover significant gas reserves or conclusively determine that they do not exist. Only then can we plan realistically for the future.
Managing Gas Scarcity: Who Should Get Priority?
Just Energy News: How should gas be allocated during the current crisis?
Prof Ijaz Hossain:
We must prioritise economic productivity. Gas should go first to industries that generate employment, exports, and growth. Domestic consumption, while important, does not directly create economic output.
Using gas-generated electricity primarily for household consumption is inefficient. Pricing, supply, and utilisation must be rationalised. Unproductive use must be discouraged through better pricing and efficiency standards.
Tackling Pilferage and System Loss
Just Energy News: Gas pilferage is reportedly costing billions of taka annually. How can this be addressed?
Prof Ijaz Hossain:
Pilferage is now indefensible. We are no longer stealing cheap domestic gas; this is imported LNG costing $10–12 per unit. System losses should not exceed two percent, yet losses of eight to ten percent are being reported.
The interim government must act decisively. Advanced metering, SCADA systems, and strict enforcement are essential. Failure to control theft could ultimately force reductions in domestic gas supply.
Power Sector Subsidies and Tariffs
Just Energy News: How do you assess the power sector under the interim government?
Prof Ijaz Hossain:
Unfortunately, subsidies have increased rather than decreased. Ideally, the government should have capped subsidies at previous levels. Instead, pressure from the IMF is now pushing tariff increases, which burden consumers.
Oil-based power plants contribute significantly to high costs. Phasing them out over five years could reduce tariffs by Tk 4–5 per unit. Renewable energy could save $500 million to $1 billion annually, easing the subsidy burden.
Can Consumers Bear Higher Prices?
Just Energy News: Can consumers absorb tariff hikes?
Prof Ijaz Hossain:
A gradual increase of around Tk 2 over three years is manageable. A sudden Tk 4–5 hike would provoke backlash. Pricing must be gradual and predictable.
Who Should Pay More?
Just Energy News: Which consumers should bear the burden?
Prof Ijaz Hossain:
Lifeline tariffs have served their purpose, but they must eventually be phased out. Low prices encourage misuse. Rural consumers can increasingly turn to rooftop solar, reducing pressure on the grid.