Despite allocating Tk 6,500 crore in subsidies, the government of Bangladesh is projected to face a deficit of Tk 11,176 crore in its LNG (liquefied natural gas) operations in the upcoming fiscal year, according to official budget documents and energy sector insiders.
The government expects to earn Tk 38,970 crore by selling gas in 2025. However, the total cost of LNG imports is estimated at Tk 56,646 crore—creating a substantial financial gap that subsidies alone cannot close.
According to energy adviser Fouzul Kabir Khan, the increased reliance on LNG imports has widened the deficit. “If industrial production is disrupted due to gas shortages, the economic losses will be even higher,” he said. “That’s why the government is trying to balance supply without raising gas prices.”
Currently, Bangladesh supplies approximately 2,700 million cubic feet of gas per day. Of that, 1,900 to 2,000 million cubic feet come from domestic sources. The remainder—roughly 700 to 800 million cubic feet—is imported as LNG. The blended sales price of this gas is Tk 22.64 per cubic meter, while the average import cost stands at Tk 29.72. That means the government incurs a loss of Tk 7.08 for every cubic meter sold.
The financial burden has prompted the government to explore external funding options. It is currently seeking a $350 million loan from the World Bank to cover payment obligations amid a continuing dollar crisis.
Petrobangla, the state-run oil and gas corporation, plans to import 115 LNG cargoes in 2025—a 33% increase from the previous year. Of these, 59 cargoes will be purchased from the volatile spot market, while 56 will be secured through long-term contracts. Spot market purchases are significantly more expensive, with each cargo costing between $45 million and $50 million.
To reduce the financial strain, the government has proposed raising gas tariffs for certain users. New industrial connections may see prices rise from Tk 30 to Tk 40 per cubic meter, while captive power producers could face a hike from Tk 31.5 to Tk 42.
Additionally, gas supply to power plants is set to be reduced from 1,200 mmcfd to 1,050 mmcfd, with the saved volume redirected to industries in an effort to keep production running without hiking consumer tariffs.
With global energy prices volatile and foreign exchange reserves under pressure, the government faces a tough balancing act. It must ensure sufficient energy for industries to support economic growth, while managing a swelling subsidy bill and avoiding consumer backlash over price hikes.
In the absence of domestic gas discoveries or significant energy policy reform, experts warn that this fiscal burden could continue to grow in the years ahead.
FP/Raj
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