Energy plans strain under budget constraints

Energy Division seeks additional Tk 16.30b in FY27 budget

FE REPORT | Published: March 28, 2026 23:17:34

The Energy and Mineral Resources Division has sought an additional Tk 16.30 billion in the FY2026-27 budget, warning that a funding shortfall could disrupt key projects and weaken the country's energy security efforts.
The request comes amid mounting pressure on public finances, as authorities push ahead with ambitious plans to boost domestic gas output and reduce reliance on imports.
Officials caution that without timely support, critical energy infrastructure and exploration initiatives could face delays.
In a formal communication to the Finance Division, the energy authorities said ongoing and pipeline projects linked to fuel exploration, extraction, import and distribution are facing a severe funding shortfall despite earlier budget provisions.
It also pointed out that the government has adopted an ambitious plan to drill around 100 new wells by 2028 to boost domestic gas output and reduce import dependence. At the same time, multiple infrastructure projects aimed at strengthening transmission and storage capacity are underway.
The programme is now jeopardised by a significant gap between the division's requirements and the Finance Ministry's current budget ceiling, an official concerned said.
The letter serves as a stark admission that the existing budget is insufficient to meet the country's primary fuel demands. Officials warned that failure to allocate the requested Tk 16.30 billion could disrupt key initiatives.
As discussions on the FY 2026-27 budget continue, the division's "urgent request" underscores a deepening challenge that could leave the country's industrial and domestic sectors vulnerable to energy instability for years to come, a source said.
The division noted that a wide range of projects, including oil and gas exploration, pipeline expansion, LNG infrastructure, refinery upgrades and mineral resource development, are currently under implementation or in the approval pipeline.
Officials said these initiatives will require sustained financing over the medium term, adding further pressure on the development budget.
The fresh demand comes at a time when the government is already grappling with tight fiscal space, rising subsidy burdens and competing budgetary priorities.
Finance Division officials are understood to be reviewing the proposal, but insiders indicated that accommodating such a large additional allocation will be "challenging" under current macroeconomic conditions.
In its concluding remarks, the Energy Division stressed that ensuring stable energy supply, boosting domestic resource extraction and managing import dependency require "immediate and adequate budgetary support".
It urged the Finance Division to reconsider the allocation ceiling and provide the requested funds to avoid disruptions to what it described as "nationally critical" projects.
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