Aug 16, 2025
| MD Shamim Jahangir | Just Energy News
The government is moving to phase out subsidies on imported Liquefied Natural Gas (LNG) from the next fiscal year, after spending more than Tk 36,712 crore over the past seven years to keep gas prices stable.
Energy and Mineral Resources Division (EMRD) Secretary Mohammed Saiful Islam said efforts to cut LNG import costs are already paying off. “We have signed a deal with OQ Trading International of Oman that reduced the LNG spot market premium from 63 cents to 15 cents. We hope to bring it down further, close to 10 cents,” he told Just Energy News.
For FY 2025–26, the government has allocated Tk 6,000 crore in LNG subsidies. However, EMRD expects improved deals, tax savings, and higher revenues from new gas sales agreements with Kafco and LafargeHolcim to gradually eliminate the subsidy burden. Petrobangla’s finance director AKM Mizanur Rahman said avoiding double taxation alone will save Tk 700 crore this year, while the new contracts are expected to generate Tk 1,104 crore in additional annual revenue.
Rising LNG Burden
Official data shows the government still faces a Tk 4.70 price gap per cubic meter due to declining domestic gas production. Bangladesh imported 94 LNG cargoes last fiscal year and plans to import 108 this year. Energy experts have warned of a deepening supply crunch. The Vice Chancellor of Independent University noted that natural gas reserves could be severely depleted within four to five years. “The gas crisis will intensify, forcing consumers to shift to alternative fuels,” he cautioned.
Gas Development Fund (GDF)
Petrobangla plans to tap the Gas Development Fund (GDF) for low-cost loans to finance LNG imports. From August 2009 to June 2025, Tk 17,707 crore was deposited into the GDF. Of this, Tk 7,403 crore was disbursed as loans for 45 projects under BAPEX, BGFCL, and SGFCL, while Tk 6,000 crore went to LNG imports. Another Tk 3,000 crore was transferred to the government treasury. The fund now holds Tk 1,304 crore, though Petrobangla has sought further low-interest loans to meet rising import demand.