Bangladesh’s Energy Import Bill Could Rise by $2.8 Billion

Dhaka, Sep 04 (V7N)- Bangladesh’s energy import costs could rise by around US$2.8 billion, or nearly Tk35,000 crore, this year if international prices of oil, gas and coal remain at current levels, according to a report by international research organization Zero Carbon Analytics (ZCA).

The report, published Thursday, said Bangladesh’s fossil fuel import costs could increase by around 30 percent in 2026 compared with 2025. The additional expense would be equivalent to nearly 10 percent of the country’s trade deficit, potentially putting further pressure on inflation, foreign exchange reserves and the taka.

ZCA warned that continued high energy prices could reduce Bangladesh’s import-payment capacity from around 5.7 months to 5.2 months.

The organization also noted that the additional money required for fuel imports could instead finance around 8 gigawatts of rooftop solar power—equivalent to approximately 25 percent of Bangladesh’s current electricity generation capacity of about 32 gigawatts.

LNG Imports Fall, Costs Remain High

Bangladesh’s LNG imports declined by around 13 percent between January and August compared with the same period last year. The sharpest fall occurred in July and August amid supply disruptions through the Strait of Hormuz.

According to ZCA, LNG imports stood at around 630,000 tonnes in July but plunged to approximately 110,000 tonnes in August. Despite the decline in import volumes, however, the country’s fuel bill is not expected to fall because of elevated international energy prices.

Around 64 percent of Bangladesh’s electricity generation depends on gas. Any disruption in LNG supplies therefore directly affects power generation. On August 11, the country’s electricity supply deficit reached 3,592 megawatts, roughly 20 percent of demand at the time.

The gas shortage is also affecting industries and agriculture. ZCA said six of Bangladesh’s seven major fertilizer plants were either shut down or operating at reduced capacity because of inadequate gas supplies. Production at some factories in Savar, Ashulia and Dhamrai has reportedly fallen by 15 to 20 percent.

Import Dependence Raises Energy Risks

ZCA identified Bangladesh’s heavy dependence on imported fuel as a major weakness in the country’s energy system. In 2023, imports accounted for around 46 percent of the country’s total fuel supply, while imported fuel was linked to approximately 65 percent of electricity demand during the 2024-25 fiscal year.

Around two-thirds of Bangladesh’s LNG supply in 2025 came through the Strait of Hormuz, leaving the country particularly vulnerable to disruptions along the route.

To manage the supply crisis, Bangladesh has been sourcing LNG from multiple suppliers and the spot market. The country has approved spot LNG cargoes for August and September and procured additional cargoes from suppliers in the UK, Australia, Malaysia and Oman. Additional diesel has also been sought from India.

Bangladesh has also signed an agreement to purchase 117 LNG cargoes from the United States between 2026 and 2038. However, ZCA cautioned that long-term contracts cannot completely eliminate supply risks.

The report noted that three major LNG suppliers to Bangladesh have recently declared force majeure, suspending contractual supplies because of circumstances beyond their control.

Experts Call for More Renewable Energy

Zakir Hossain Khan, Managing Director of Change Initiative, said LNG could not ensure Bangladesh’s energy independence. He argued that even when supply contracts exist, global crises can prevent fuel from reaching the country on time while costs continue to rise.

He warned that Bangladesh’s LNG-dependent energy system carries significant risks and called for greater investment in renewable energy, particularly rooftop solar power.

Shafiqul Alam, Chief Energy Analyst for Bangladesh at the Institute for Energy Economics and Financial Analysis, also said increasing dependence on LNG was not a sustainable solution to the country’s energy-sector weaknesses.

According to him, if planned LNG terminals become operational, Bangladesh’s LNG imports could exceed 700 billion cubic feet annually by 2030. Depending on international prices, the annual import bill could reach between US$8.5 billion and US$14 billion.

Such a rise in LNG dependence could increase electricity and gas prices, weaken industrial competitiveness and place additional pressure on the economy, he warned, without significantly improving Bangladesh’s ability to withstand future energy crises.

END/SMA/AJ