BD pays over double for LNG amid gas price spike

Bangladesh has purchased two liquefied natural gas (LNG) cargoes at more than double their earlier price as authorities attempt to stabilise the country’s strained gas supply system, highlighting the growing financial pressure of relying on volatile global energy markets.

Officials from Bangladesh Oil, Gas and Mineral Resources Corporation (Petrobangla) confirmed that the emergency purchases were made from the international spot market to address ongoing energy shortages affecting electricity generation and industrial activity. A K M Mizanur Rahman, director (finance) at Petrobangla, said one LNG cargo is expected to arrive on 15 or 16 March, while the second shipment is scheduled to reach the country on 18 March.

According to Petrobangla officials, the government had little choice but to purchase the cargoes despite the sharp price increase. Rahman said one shipment was bought at nearly double the earlier price, while the other was acquired at more than twice the cost previously paid for similar volumes. The purchases underline how Bangladesh, like many energy-importing economies, has become increasingly exposed to global LNG price fluctuations as domestic gas production declines.

Sources at Petrobangla said the two cargoes together will cost about Tk2,300 crore, compared with around Tk1,100 crore spent for similar LNG imports just a month earlier. The price surge means the government will pay roughly Tk1,200 crore more for the same volume of gas. Energy traders Gunvor Group and Vitol are supplying the shipments, both of which are major participants in the global LNG trading market.

The cargo sourced from Gunvor is priced at about $28.28 per unit and is expected to cost roughly Tk1,279 crore. In comparison, a similar LNG cargo purchased in January had cost about Tk500 crore, illustrating the rapid escalation in international gas prices. Another shipment secured from Vitol is priced at approximately $23.08 per unit.

Energy analysts say the purchase reflects the structural challenge facing Bangladesh’s energy system. Natural gas accounts for the majority of the country’s electricity generation and is also widely used by industries such as textiles, ceramics and fertiliser production. However, domestic gas fields have been gradually declining in output, forcing the government to rely more heavily on imported LNG.

Bangladesh currently imports LNG under long-term supply contracts with Qatar and Oman, which provide a more stable price structure. However, those contracted volumes are often insufficient to meet rising demand during peak consumption periods, particularly when electricity demand surges during hotter months. In such situations, the government turns to the spot market, where prices can change rapidly depending on global supply and demand.

The volatility of the spot LNG market has become a growing concern for policymakers. Global LNG prices have been influenced by shifting demand across Asia and Europe, supply constraints from exporters and competition among buyers during periods of high consumption. Smaller importers like Bangladesh often face higher prices because they purchase fewer cargoes and have less bargaining power compared with larger LNG buyers such as Japan, China and South Korea.

Higher import costs could also have broader implications for Bangladesh’s power sector and national budget. Gas-fired power plants supply a significant share of the country’s electricity, meaning fuel shortages can quickly translate into reduced electricity generation. When gas supply falls, industries often experience production slowdowns, while the government may need to increase subsidies to keep electricity and gas tariffs stable for consumers.

Energy policy experts say the latest purchases highlight the urgency of diversifying Bangladesh’s energy strategy. The government has already announced plans to expand renewable energy capacity, increase cross-border electricity imports and encourage further exploration of domestic gas resources. However, these measures take time to implement, meaning LNG imports will likely remain a key component of Bangladesh’s energy supply in the near future.

For now, the arrival of the two LNG cargoes later this month is expected to provide temporary relief to the country’s gas network. Yet the sharp rise in import costs illustrates a broader reality confronting energy-importing nations: maintaining energy security is becoming increasingly expensive as global fuel markets grow more competitive and unpredictable.