Decomposition analysis of natural gas consumption in Bangladesh using an LMDI approach

Due to the vast conserves of Bangladesh's natural gas's total demand has increased in the last decade. Natural gas was a primary source of energy and played a vital role in Bangladesh's sectorial consumption and rapid economic development. This study explores the factors influencing natural gas consumption in Bangladesh from 1994 to 2018 using logarithmic mean Divisia index (LMDI) between changes in influencing factors such as share of natural gas, energy intensity, economic structure, economic activity, and population. This study has been conducted at the national level. The results show that: (1) economic structure, population, and the economic activity performed a significant role in growing natural gas consumption during the period. (2) Energy intensity shows a decreasing trend and hindered it. (3) Natural gas use indicates a mixed effect, which is showing a strong relationship between gas consumption and the economy. (4) Based on the overall consequences, the increase in population, economic activity, and economic structure are the crucial factors responsible for the rise in natural gas consumption. Concurrently, the energy intensity impacts contribute to lessening the gas consumption. Finally, the scenario analysis found that the increase in natural gas utilization estimates higher economic development and saves more energy over the future. Based on the main findings, few targeted policy recommendations are provided below.

Automated summary

This study examines the factors influencing natural gas consumption in Bangladesh using the LMDI method, and it was conducted at the national level. The results indicate that economic structure, population, and economic activity play significant roles in the increase of natural gas consumption, while energy intensity hinders its growth.