Future outlook and influencing factors analysis of natural gas consumption in Bangladesh: An economic and policy perspectives

ABSTRACT

The development of mechanization and technology has triggered the rising energy consumption in various sectors. The study objective is to investigate the relationship between gas consumption share, energy intensity, economic structure share, per capita gross domestic value, and population at the sectorial level from 1994 to 2020. This study analyzes the factors in three ways first, the study applies decomposition analysis between key factors. Second, an appropriate decoupling method is applied to investigate the impacting factors to check the driving factors affecting the decoupling using the logarithmic mean Divisia index method. Third, based on aggregated and sectorial variations, the ratio decomposition of each sector is estimated. The results show that the economic activity effect is the main driving factor in raising gas consumption, which increased by 15.11 crore Tk./million during 1994–2020. The energy intensity trend declined by 14.87 Mtoe/crore Tk., which shows an imperative role in natural gas consumption efficiency for production and in economy. The economic structure share provided a record decline by 52.79 crores Tk. during the COVID-19 situation while a significant increase in gas consumption was found until 2013, which could be significant under decomposition changes. Three decoupling states such as expansive negative decoupling, expansive coupling and weak decoupling were found in which the decoupling relationship was gradually a dominated by a weak decoupling. The sectorial index provides a maximum of weak decoupling in which energy-saving technology gap change was found in power, captive power, industry, tea estate, compressed natural gas, and fertilizer sectors. Finally, the scenarios analyzed that natural gas consumption estimates maximum gross domestic product and conserves more energy in the future. Briefly, the decoupling process and its leading factors were obvious among nine major sectors.