Ballooning energy cost overruns set budget amid the Gulf crisis as a hefty subsidy worth around Tk 45 billion or US$370 million is sought only to meet LNG-import bills for a single month of April.
Officials say the state-run Petrobangla has placed the subsidy demand with the Ministry of Finance (MoF), as global fuel prices spike and reserves a limited.
The April subsidy amount, as sought by the corporation, is more than 50 per cent of the entire subsidy amount worth Tk 89 billion it got from the MoF in the previous fiscal year (FY) 2024-2025.
"We sought the subsidy as we shall be importing eight liquefied natural gas (LNG) cargoes from volatile spot market out of total nine LNG cargoes we have planned to import in April," Petrobangla director for finance AKM Mizanur Rahman told The Financial Express on April 2.
State-run Rupantarita Prakrtik Gas Company Ltd (RPGCL), a subsidiary of Petrobangla, bought seven LNG cargoes from spot market through tenders and another spot cargo scheduled to be delivered in March has been shifted to April, he said.
The RPGCL, a wholly owned subsidiary of Petrobangla and responsible for LNG trading in Bangladesh, palpably runs a rough course for supply disruptions in the wake of the Mideast mayhem triggered by US-Israel attacks on Iran.
Average LNG-import costs of the eight spot LNG cargoes to be delivered in April range up to around US$21 per million British thermal unit (MMBTu). Hadn't the war happened and the Strait of Hormuz not restricted, Bangladesh would import most of the LNG cargoes from long-term suppliers at a cost of around $9.0 per MMBTu to $11 per MMBTu, he said.
Bangladesh imported two LNG cargoes from spot market in March after a hiatus of over two months, to tide over LNG-supply uncertainty stemming from the Middle East war, he mentions.
To foot increased bills for the must-have fuel to supplement the supply of domestic natural gas in March, the Ministry of Finance provided Tk 10 billion to Petrobangla.
"If the war doesn't stop and the Strait of Hormuz remains restricted for Bangladesh-bound LNG cargoes, Petrobangla's subsidy requirement to import LNG in the current fiscal year, or FY 2025-2026 (July-June), might go all-time high," says the Petrobangla official.
Petrobangla had previously received state subsidies worth around Tk 25 billion in FY 2019-2020, Tk 35 billion in FY 2020-2021, Tk 34.97 billion in FY 2021-2022, Tk 60 billion in FY 2022-2022, Tk 63.32 billion in FY 2022-2024, and Tk 89 billion in FY 2024-2025 on account of LNG imports, he says.
Bangladesh had trimmed LNG buys from the spot market until February after starting the import under new long-term sales and purchase agreements, or SPAs, from Qatar and the US from January along with previous suppliers, the official elaborates on the fuel-supply lines.
Riding on LNG supplies from new sources, Petrobangla had a plan to buy only a dozen cargoes from spot market in 2026 compared to the import of 49 spot LNG cargoes in 2025.
But halt in delivery from the long-term suppliers and a couple of short-term suppliers of Saudi Arabia and Oman forced Petrobangla to go for LNG purchases from spot market extensively.
Delivery of a total of eight LNG cargoes has so far been affected for Bangladesh due to the 'force majeure' by the long-term LNG suppliers as well as restrictions on the passage of ships through the Strait of Hormuz, he mentions.
Since Bangladesh's LNG imports began in 2018, the country has imported approximately 35.878 million tonnes (mt) of LNG through 579 cargoes as of February 2026, according to RPGCL data.
Bangladesh's overall natural gas supplies currently hover around 2.53 billion cubic feet per day, inclusive of 822 million cubic feet per day of regasified LNG, according to official Petrobangla data as of March 30.
Azizjst@yahoo.com