Bangladesh has exhausted its entire budget allocation for liquefied natural gas (LNG) import subsidies within the first three months of the current fiscal year, as disruptions to supplies from the Middle East have forced the government to rely more heavily on expensive spot-market purchases.
The country has faced a severe gas shortage this year following disruptions to LNG supplies under long-term contracts with Qatar and Oman due to the ongoing conflict in the Middle East. As a result, the government has had to turn increasingly to the volatile international spot market to meet domestic demand.
Under normal demand projections, the government plans to import 115 LNG cargoes in 2027. Of these, 103 cargoes are expected to be sourced through long-term and short-term contracts, including 40 cargoes from Qatar. However, the prospect of resuming LNG supplies from Oman remains uncertain.
Petrobangla is also exploring several alternative sources to address the supply shortage.
Energy experts warn that importing LNG at higher prices could place further pressure on Bangladesh's already strained economy.
Professor M Shamsul Alam, energy adviser to the Consumers Association of Bangladesh (CAB), said gas prices could become unaffordable for both households and industries if LNG costs exceed Tk 80 per cubic metre.
"At a price of more than Tk 80 per cubic metre, household consumers will not be able to afford gas. Even industries will struggle to operate. Captive power generators cannot run, electricity generation will be disrupted, and factory boilers will also become impossible to operate," he said. Rising Global LNG Prices Pose Fresh Challenges Experts expect international demand for LNG to increase over the coming months due to seasonal weather conditions. Uncertainty surrounding future supplies from the Middle East could further intensify competition in the global market.
They have advised Bangladesh to increase domestic gas exploration and production while identifying alternative sources of LNG imports to reduce its dependence on supplies from the region.
Dr Mohammad Amirul Islam, a professor at the Military Institute of Science and Technology (MIST), warned that LNG prices could rise sharply if demand and competition increase in Europe.
"If prices rise in Europe, LNG could reach $40 to $50 per unit, as happened last time. In that situation, the cost of a single LNG cargo could rise to Tk 20 billion, Tk 25 billion or even Tk 30 billion," he said.
He explained that under previous government-to-government (G2G) agreements with Oman, Qatar and Excelerate Energy, LNG prices were calculated by adding $0.50 to 10 percent of the Brent crude oil price. Under that formula, the cost was around $8 to $9 per unit.
However, even under G2G agreements, suppliers are now following the Japan-Korea Marker (JKM) price index, he said.
According to Islam, the current JKM price stands at around $19 per unit. If the index rises to $50, Bangladesh could be forced to purchase LNG at that higher rate.
Energy analysts fear that Bangladesh could face serious economic risks if it fails to secure a stable and affordable supply of energy in the coming years.
They stress that increasing domestic gas production, diversifying LNG import sources and strengthening long-term energy security will be crucial to managing the country's growing energy challenges.
