Bangladesh Grapples with Soaring LNG Prices, Industry Slows
Bangladesh is facing a surge in liquefied natural gas (LNG) prices on international markets, causing power cuts and a slowdown in industry.
The Bangladeshi government attributes this to the depletion of domestic gas reserves, making the country increasingly reliant on imports. The effective closure of a strategic Gulf shipping route has forced the country to rely more heavily on the spot market, which is costlier and more volatile than long-term contracts.
The spot price of LNG delivered to Northeast Asia reached $25.70 per mmBtu during the week of September 1-5, 2026, before climbing to $26 per mmBtu the following week - its highest level since December 2022, according to market data cited by the Al Attiyah Foundation.
The Bangladeshi government subsidizes gas and electricity prices for end consumers, which is mechanically strained further by rising import costs. The combined subsidies paid to public electricity and gas operators represented approximately 1.32% of gross domestic product in fiscal year 2022-2023 and 1.10% in fiscal year 2023-2024.
The government has set a target of 10,000 megawatts of installed solar capacity within five years, accompanied by a five-year tax exemption for investors in solar and lithium battery projects. The minister also reportedly cited coal as a fallback option, but this contradicts available market data showing the benchmark thermal coal price rising between 20% and 31% since the conflict.