LNG Price Surge Reveals South Asia’s Energy Fragility

The surging costs of liquefied natural gas (LNG) are straining Bangladesh’s energy infrastructure, forcing the government to allocate more funds to subsidize expensive gas imports. This shift is leaving fewer resources for other development initiatives. The reduced supply has led to electricity shortages, power outages, and decreased industrial output, with gas pressures in key industrial zones dropping from 15 PSI to 5 PSI. Factories producing garments, food, ceramics, and pharmaceuticals have been compelled to cut production.

India has encountered similar challenges but has managed to mitigate the impact more effectively. Both countries depend heavily on energy imports from the Middle East, with India receiving around 60% of its crude oil and LNG, and 85% of its LPG, through the Strait of Hormuz. Initially, India restricted gas consumption, exposing energy-intensive industries to rising costs. However, as the world’s fourth-largest LNG consumer, India imported over 25 million metric tons in 2025. Its diversified supply network allowed it to replace lost Qatari cargoes, ensuring 90-95% of its gas supply remains stable.

In contrast, Bangladesh’s heavy reliance on Qatar has left it vulnerable to expensive spot purchases. To build resilience, Bangladesh is now exploring alternative LNG supplies from Indonesia, Australia, and China while expanding renewable energy. However, its dependence on imported LNG is expected to grow, leaving the country exposed to future disruptions and volatile energy prices.