The state owned gas provider, Titas, is due to start a new drive against illegal connections in its franchise area. It estimates these consume 200m cubic feet of gas per day, causing daily losses of several hundred crore taka for the government.
However, the problem of illegal connections is only a symptom of inefficiency in the country’s gas supplies, it is not the cause.
Gas, like diesel and power, is not priced efficiently or prudently. Ill targeted subsidies and inefficiencies create perverse incentives which enable and encourage waste and poor service to customers.
An artificially low price enables households to waste precious gas supplies by leaving burners on unnecessarily, and this inefficiency extends throughout the system. The consequences in terms of hardship for businesses and consumers are widespread cuts and fluctuations in supplies.
Despite occasional crackdowns, officials of Titas, remain alleged to be complicit in enabling new and/or illegal connections themselves, whilst the company is slow in increasing capacity and infrastructure.
While combating corruption and improving efficiency may help, the root cause of the sector’s inefficiency lies in pricing policy.
It does not make sense to subsidise gas or other non-renewable energy sources. This only uses up scarce resources and increases fossil fuel emissions.
Gas must be priced properly to discourage waste and improve efficiency. Proper pricing is needed to provide the funds needed to modernise supplies and incentivise companies to become efficient.
It will also stimulate more private investment in renewables and allow taxpayer funds that are currently wasted to be targeted to help consumers in need.
Source: UNBConnect
