Bangladesh Spends Nearly Half of Allocated LNG Subsidy Amid Global Unrest

The Bangladesh government has disbursed nearly 43% of its allocated subsidy for liquefied natural gas (LNG) import within just one and a half months of this fiscal year. The Finance Division had released Tk 47 billion ($5.2 billion USD) in favor of the Energy Division, which is more than nine times higher than the amount disbursed during the same period last year.

The government allocated Tk 110 billion for LNG subsidy in the current budget. However, due to the recent surge in global unrest and disruptions in supply chains, the spot LNG prices have reached nearly $22 per million British thermal units (MMBtu), almost double the price before the conflict began. The cabinet committee on government purchase approved a proposal to buy one cargo of LNG from the spot market at $23.93 per MMBtu amid severe supply shortage.

The Finance Division officials say that scores of LNG cargoes have been procured from the global spot market due to the shortage in supply from long-time contractors, resulting in huge extra spending. A senior energy division official stated that this year's LNG subsidy will significantly surpass last year's spending for the same.