Access to gas remains elusive for industries

Access to gas remains elusive for many industries as some 1,400 applications for new connections, load expansion, re-connection, or replacement are pending with Titas Gas Distribution Company alone.

Annoyed at the situation, industrialists said the availability of gas can increase their output significantly and help the country recover the economic losses triggered by Covid-19, but bureaucratic tangle, corruption, and a lack of coordination among government agencies have made access to gas a nightmare for them.

"I got the permission for a gas connection after more than two years. Now the file is moving from one table to another for getting approval from the Roads and Highways Department for digging road to set up the connection," said a frustrated businessman.

Another industrialist who has applied for load expansion to enhance his factory's capacity in Tangail has been waiting for more than a year. He has been now running the factory with diesel, which costs three times higher than gas.

When the government made the landmark decision to import expensive liquefied natural gas (LNG) from August 2018, businesses had thought they would then see an end to the suffering caused by the gas crisis.

However, that did not happen as around 40 percent of LNG regasification units remain unused.

The state-run Petrobangla is currently regasifying around 601 million cubic feet per day (mmcfd) of LNG from two LNG terminals, although the two units have a cumulative capacity to re-gasify around 1,000 mmcfd LNG.

This means a capacity to supply around 400 mmcfd more gas remains idle, for which the government is paying around $450,000 (Tk3.8 crore) per day as capacity charge to the owners of the floating storage and regasification unit (FSRU).

Commenting on the stockpiling of applications for gas industrial connection, Md Anisur Rahman, senior secretary of the Energy and Mineral Resources Division and chairman of the governing board of Titas Gas, however, said giving gas connections to industries is going on. "But due to the current pandemic situation, some applications have got stuck," he added.

Anisur Rahman also said they had approved connections to some industries in the last board meeting.

In its latest board meeting held on Sunday, Titas Gas approved only 20-25 industrial connections, which include fresh connections, load expansion, re-connection, and replacement of connections.

Earlier in 2009, the government suspended new gas connections to households due to mounting demands against a limited supply of the utility and a depletion of the natural gas reserve. It was said that only new industrial connections would be allowed.

On January 3, 2011, a committee was formed headed by the prime minister's energy adviser to tighten new gas connections and load expansions in the industrial sector.

Thousands of applications for new connections got stuck in the process as it took years to get approval from the committee.

Upon the arrival of LNG, however, the energy ministry abolished the committee on May 15, 2019, and the authorisation power for new gas connections was handed over to the respective company's board.

However, there has not been much progress even after one year of that move as the stockpile of applications for gas connections remains as high as it was a year ago.

The existing cumbersome procedures and conditions are pulling the process from behind. Applications are taken through the zonal offices of the company and it is sent to different departments of Titas Gas.

According to officials of Titas Gas, 10 documents including the trade licence are required for getting a new gas connection.

The contractors, who are appointed by Titas for setting up connections to industries, are another obstruction for the businesses.

"Contractors work as middlemen. They take money but make us wait for months, even years," said a textile miller who has a factory in Gazipur.

When asked about this, Ali Mohd Al-Mamun, managing director of Titas Gas, said there are some reasons that delay the process of giving gas connections.

"Customers' failure to provide efficiency documents against equipment such as boiler, generator, and other machinery set up in their factories is among the reasons that delay the process," he said.

However, businesses said they would install high-efficiency generators in phases as they cost Tk5-10 crore or even more each, depending on capacity.

"I cannot throw away the generator I have now! If I could use an efficient one, it will reduce my expenditure, not that of Titas'," said an owner of a spinning mill.

Energy cost in the industrial sector on the rise

Energy cost in the industrial sector has been increasing gradually, posing a big challenge for the country's competitiveness.

In the last decade, the gas price for the industrial sector has increased by 82.59 percent.

In 2009, the price of industrial gas was Tk5.86 per cubic metre. As per the latest tariff order, the price of per unit of industrial gas has risen to Tk10.70.