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Stepping on the gas

  • Published at 12:03 am July 2nd, 2019
Stove, Fire, Gas

Gas is now a scarce commodity in Bangladesh, and its price needs to reflect this

It should come as little surprise that the government’s decision to increase the cost of gas -- somewhere between 21% to 64%, depending on the sector -- has resulted in much opposition from consumers and business owners alike.

But the truth of the matter is that gas is a luxury that the urban poor rarely, and the rural poor almost never, have access to, and ends up being a commodity subsidized primarily for the urban middle classes. 

Indeed, the rural poor typically pay more for their energy than do the urban middle classes who enjoy the gas subsidy.

In fact, one of the reasons that we have been unable to expand our gas network to the extent we should have is because the price has been kept artificially low, thus starving the sector of the funds needed for exploration and expansion of the network.

While low gas prices may seem like a good idea in the short term, they benefit only a relatively small slice of the population, and not the one most in need.

Furthermore, gas is now a scarce commodity in Bangladesh, and its price needs to reflect this. Let the market decide how this resource is to be used most efficiently. By subsidizing gas to the extent we do, we only ensure that it is used inefficiently, and does not go where it would do most good or where it is needed most.

In addition, the money saved from higher gas prices can both be re-purposed towards the population truly in need and also provide funds for the government to diversify our energy sector -- from importing liquefied natural gas to investing further in renewable sources and green energy -- which is really where we should be spending money.

If we truly care about the poor and disadvantaged, such a move is not only warranted, but necessary.

If we continue to complain about gas prices, citing consumer rights and the plight of the urban middle classes as the reason, then it betrays a complete lack of understanding for how out-of-touch we are when it comes to catering to the poor in this country. 

It is ironic that some of the loudest voices in defense of the subsidy are those who claim to speak for the poor, the vast majority of whom do not even have access to gas.

It is only through cutting down this wasteful subsidy that Bangladesh can both focus on serving the energy needs of the neediest of its citizens and at the same time invest in more sustainable long-term energy solutions for the future, which is where the funds should be directed.