(Bloomberg) -- South Asia’s emerging economies are cranking up older power plants that burn highly-pollutive fuel oil as rising liquefied natural gas prices put cleaner energy sources out of their reach. 

Bangladesh is generating 5,000 megawatts of electricity from fuel oil-fired power stations this month, about 25% more than a year earlier, said Muhammed Aziz Khan, the chairman of Summit Power International Ltd., which owns utilities in the country. More than a third of the 40 LNG cargoes the nation has tendered over the past year were canceled due to elevated prices, he said. 

“At one time Bangladesh was encouraged to switch to gas, but the government kept the fuel plants,” Khan said in an interview. “This has come as a huge upside during the Russia-Ukraine war.”  

North Asian benchmark LNG prices have tripled over the past year -- and spiked dramatically after the invasion of Ukraine -- while gains in fuel oil have been more modest. Pakistan has also been struggling to buy enough gas and has been forced to cut electricity to households and industry. India, meanwhile, phased out most of its fuel oil-fired plants, although it remains heavily reliant on coal and is grappling with a shortage of that fuel at the moment.

Seasonal demand for fuel oil is rising in Asia and the Middle East due to the higher LNG prices, industry consultant FGE said in a note this week. Pakistan, Bangladesh and Sri Lanka are forecast to import about 680,000 tons of fuel oil in April, the highest since June 2018, said Roslan Khasawneh, a senior analyst at Vortexa Ltd.

©2022 Bloomberg L.P.