The dynamics of natural gas consumption and GDP in Bangladesh

Reserves of natural gas in Bangladesh are very large and total demand has increased secularly in recent years. This paper examines the causal relationship between the consumption of natural gas and GDP in Bangladesh over the period 1980 to 2010. We find that there is a positive unidirectional causality running from GDP to natural gas consumption: movements in GDP affect the consumption of natural gas but not vice-versa. While our results rest on several statistical assumptions, they support the pursuit of policies that are in line with energy conservation. Implementing these policies will be of particular significance in light of the fact that Bangladeshʹs current reserves of natural gas will not meet its current level of consumption demand beyond the next two decades.