Amid the skyrocketing gas prices in the global market caused by the war in Ukraine, Bangladesh is considering a power load-shedding regime across the nation amid declining foreign exchange reserves. The government has sought support from the International Monetary Fund (IMF) and the World Bank. 

The move comes as high global commodities and fuel prices depleted the foreign exchange reserves to $41 billion in June this year from the $48 billion recorded in September last year, prompting the government to seek assistance from the International Monetary Fund (IMF) and World Bank for budgetary support. 

Prime Minister Sheikh Hasina said the government was considering introducing area-based load shedding of electricity for a specific time to save the fuel used for power generation, reports UNB. The step, Hasina said, will help save the country from "much harder days coming ahead". 

Gas accounts for 52 per cent of the country's total power generation, according to the Bangladesh Power Generation Board. And, 70 per cent of the total gas import is used for power generation, which has taken a toll on the country's foreign exchange reserves. 

Over the past few weeks, the supply of imported LNG gas into the national gas grid has come down substantially as the government avoided purchasing the LNG from the international spot market, where it is being traded at record high prices. 

Nazmul Ahsan, the chairman of the state-owned Petrobangla, said the government would buy LNG from the spot market only after the price comes down. "The world is in a crisis situation and everyone is taking steps to be thrifty. We are trying to produce more gas from our internal sources," he was quoted as saying by The Daily Star.

Other countries in the region, such as Sri Lanka, Pakistan, and Nepal, are also struggling to arrest the depletion of their foreign exchange reserves as a result of high fuel prices. 

However, unlike these countries, Bangladesh is better positioned, which also gives it relative enough time and space to negotiate without risking an immediate default on its external debts.

Another move that partly contributed to Bangladesh's declining foreign exchange reserves was its decision to release over $6 billion into the domestic market this year to stabilise its currency taka from depreciation. 

To support its budget, the government hopes for $4.5 billion from the International Monetary Fund (IMF) at low-interest rates and another $1 billion from the World Bank. Talks with the IMF are scheduled for the next week, and it would require the government to take structural reform, strengthening its public sector banks and monetary and fiscal policies. 

(SAM)