Bangladesh incurred a staggering financial loss of Tk 7,075 crore over the last two fiscal years due to excessive gas system losses in distribution levels, far exceeding the officially accepted limit of 2 percent, according to Petrobangla.
In fiscal year 2023–24, the country experienced an average gas distribution loss of 6.28 percent, resulting in a loss of Tk 3,790 crore. In the first nine months of FY 2024–25 (up to March), losses further increased to 7.44 percent, causing an additional loss of Tk 3,286 crore. Petrobangla also reported a 2 percent loss in transmission lines.
The figures were presented at a seminar titled “Energy Security in Bangladesh: Challenges, Solutions, and the Role of Media” by Petrobangla Director (Finance) AKM Mizanur Rahman, held Tuesday at the Petrocentre in Kawran Bazar.
While system loss — defined as technical loss in gas transmission and distribution — is officially capped at 2 percent, experts and officials acknowledged that actual losses are significantly higher, largely due to gas theft, leakage, and outdated infrastructure.
Gas Theft Disguised as System Loss
Concerns were raised that a substantial portion of the reported system loss is in fact gas theft, misclassified under technical losses. Currently, six gas distribution companies are conducting regular drives to curb illegal connections and theft.
Presenting the keynote paper, energy expert and former BUET professor Dr. Ijaz Hossain said, “Gas production has dropped to levels seen 15 years ago. There is no alternative to boosting exploration. Technical losses in both transmission and distribution now total around 10 percent — this is unacceptable. Transmission losses alone should never reach 2 percent and need to be carefully reviewed.”
Petrobangla Identifies Key Causes
Petrobangla attributed the high system losses to multiple factors: old and deteriorating pipelines, leaks at gas risers, accidental damage during third-party construction work, and numerous illegal residential connections.
However, the agency stated that several initiatives have been taken to reduce losses. These include enhanced metering and monitoring, setting loss-reduction targets for distribution companies, disconnecting illegal connections, and expanding the use of prepaid gas meters for households.
Illegal Connections Being Cut, Industrial Links Based on Supply
Petrobangla Chairman Md. Rezanur Rahman said technical losses in transmission are under close review and efforts to eliminate illegal connections are ongoing. “We have six executive magistrates working full-time on disconnecting illegal lines. With support from local representatives, the public, and journalists, this effort can be more effective,” he said.
He noted that new industrial gas connections will be issued only after confirming supply availability. “Industries pay higher prices, so supply must be ensured first. We’re preparing three priority lists, starting with factories ready for immediate connection. Most inspections are nearly done and will conclude next week,” he added.
Onshore Exploration Push, New Gas Added to Grid
Director (PSC) Md. Shoeb said a draft production-sharing contract (PSC) for onshore gas exploration has been submitted to the Energy Division for approval.
Director Md. Rafiqul Islam reported that 18 out of 50 planned wells have already been repaired, upgraded, or drilled, adding 78 million cubic feet of gas per day to the national grid. Work on four additional wells is in progress.
Petrobangla Director (Planning) Md. Abdul Mannan Patwary also outlined ongoing project updates during the seminar.
Tk 27,199 Crore in Outstanding Gas Bills
Petrobangla Director (Finance) A.K.M. Mizanur Rahman shared that the company earned Tk 54,117 crore in revenue in FY 2023–24. However, Tk 27,199 crore — nearly half — remains unpaid. The power sector accounts for the largest chunk of arrears at Tk 16,523 crore, followed by Tk 964 crore from fertiliser factories. He added that Petrobangla currently has no outstanding payments to foreign companies.
Per Unit Gas Loss at Tk 4.60
Since starting LNG imports in FY 2018–19, Petrobangla has operated at a loss on each unit of gas sold. These losses have been covered through rising government subsidies, which totaled Tk 2,500 crore in the first year and soared to Tk 8,900 crore in the last fiscal year, bringing the cumulative subsidy amount to Tk 36,712 crore.
In FY 2023–24, Petrobangla spent Tk 27.53 per unit of gas but sold it at Tk 22.93 — resulting in a loss of Tk 4.60 per unit.