Bangladesh may need an additional Tk 42,600 crore in subsidies for the energy and utility sectors by June of fiscal year 2025-26 due to ongoing instability in the Middle East, Finance Minister Amir Khosru Mahmud Chowdhury told Parliament on Tuesday.
Responding to a query from SM Jahangir Hossain, the minister said the current geopolitical situation in the Middle East has created significant risks for Bangladesh’s energy security, particularly through rising import costs of fuel, liquefied natural gas (LNG), and fertilisers, which are closely linked to the country’s power and industrial supply chains.
He noted that the impact is already visible in higher costs for electricity generation, fuel imports, transport operations, and agricultural production. Rising global energy prices, he added, could further strain Bangladesh’s power sector, increasing subsidy requirements for electricity and gas supply while also pushing up inflationary pressure in the domestic market.
According to the breakdown shared in Parliament, the estimated additional subsidy need includes Tk10,258 crore for oil, Tk11,170 crore for gas, Tk19,821 crore for electricity, and Tk1,350 crore for fertiliser - much of which is tied directly to energy pricing and supply stability.
The minister said the government is taking steps to reduce energy import dependence by diversifying supply sources, exploring domestic gas reserves, and improving efficiency in the power and energy sector. Efforts are also underway to maintain stable fuel availability for power plants and essential industries.
He added that foreign exchange management and energy pricing policies are being closely monitored to reduce external shock impacts on the power system and overall economy. Further policy actions will be taken once more precise estimates of sector-wise losses are available.
