Bangladesh imports nearly BDT 1.5 trillion worth of energy products annually, including liquefied natural gas (LNG), refined and unrefined petroleum products, liquefied petroleum gas (LPG) and coal.
Fossil fuel imports have risen at an unusual pace over the past decade. Allegations persist that ministers, bureaucrats and a section of business groups under the now-ousted Awami League government colluded to create such a situation. Investment in gas exploration and production remained inadequate, while significant delays marked efforts to build reserves and establish a sustainable supply management system in the energy sector. The sector’s import dependency was consequently pushed to excessive levels during the Awami League’s tenure.
The country’s energy sector has now become increasingly burdened with debt and liabilities. Added to that, wars and conflicts in energy-supplying countries have heightened risks to imports and domestic supply management.
Following the fall of the Awami League government, there were high expectations that the subsequent interim government would halt irrational decisions in the energy sector and steer it out of mounting liabilities. Despite some legal reforms, the previous import-oriented policy continued, preventing the sector from recovering from its fragile state.
Two decades of mismanagement, one-dimensional policymaking, and corruption and irregularities have placed the newly elected government under significant pressure from the beginning of its tenure. The recent outbreak of war in the Middle East has further strained the country’s energy supply system.
Experts say Bangladesh’s economic foundation was built on affordable gas, yet no substantial investment was made to increase production in the sector. Gas output has steadily declined, paving way for policies favouring higher imports. This has led to massive foreign currency outflows while a group of beneficiaries reportedly profited substantially.
Currently, Bangladesh imports around 7 million tonnes of fuel oil annually at a cost of approximately BDT 600–650 billion. Efforts to reduce fuel prices and manage crises have been hampered by the failure to expand the capacity of Eastern Refinery Limited. Established in 1968, the refinery’s annual processing capacity remains limited to 1.5 million tonnes. After assuming office in 2009, the Awami League government took an initiative to increase the refinery’s capacity by 3 million tonnes, raising the total to 4.5 million tonnes. The plan was never implemented. The recently dissolved interim government approved implementing the second unit of the refinery. Experts noted that the construction of the second unit would significantly reduce the need to import refined petroleum products. The government currently spends BDT 500–550 billion annually on refined fuel imports. Expanding domestic refining capacity would not only cut import dependency but also enhance storage capacity during a crisis period according to experts.
Bangladesh’s journey toward self-reliance in the gas sector began after independence, with the decision to purchase five gas fields previously owned by the multinational Shell Oil Company. An agreement to acquire the Titas, Habiganj, Kailashtila, Bakhrabad and Rashidpur gas fields was signed on August 9, 1975. The fields were then nationalised. These five fields still account for around 80 percent of the gas supplied by domestic companies.
According to two former senior officials of Petrobangla, Bangladesh signed an agreement with the former Soviet government in 1972 to develop gas fields and drill wells to achieve energy self-sufficiency. Under that agreement, the Soviet government provided financial and technical assistance to the country’s energy sector.
Later, during the tenure of former president Ziaur Rahman, a technical cooperation agreement was signed with West Germany to further develop the sector. The primary objective of these agreements was to strengthen Bangladesh’s domestic energy capacity. The groundwork laid during that period enabled the country to manage its energy needs effectively until 1990.
After 1995, US energy giant Chevron signed contracts for several gas fields previously left by foreign operators within the country. Under a Production Sharing Contract (PSC), the company began operations in the Bibiyana, Moulvibazar and Jalalabad gas fields in 1995. By developing the wells and applying advanced technology, Bibiyana in particular emerged as a major contributor to national gas output, playing a significant role in sustaining domestic production activities.
Subsequently, when international tenders were invited for offshore gas exploration, several companies expressed interest and initiated work. However, many eventually withdrew, mainly because they could not reach agreements with Petrobangla.
A major crisis in the gas sector began around 2015, when supply shortfalls widened against rising domestic demand. The now-ousted AL government then formulated a master plan for the gas sector in 2017, outlining import-based solutions to address the deficit.
From 2018, Bangladesh began importing gas under long-term contracts with two countries. Momentum slowed noticeably in domestic gas exploration when these imports began. During the tenure of the Awami League government’s power, energy and mineral resources adviser Tawfiq-e-Elahi Chowdhury and State Minister Nasrul Hamid, a syndicate allegedly emerged around LNG imports. Allegations suggest that this group prioritised imports while stagnating domestic exploration activities. Tawfiq-e-Elahi Chowdhury faces serious accusations of facilitating corruption, irregularities, and money laundering in the power and energy sectors. He is alleged to have influenced awarding contracts to foreign companies in exchange for commissions. Specific allegations include irregularities in the construction of foreign power plants, corruption in the LNG sector, providing contracts to blacklisted firms and securing file approvals from the highest levels without proper scrutiny.
According to Petrobangla data, Bangladesh imported LNG worth BDT 2.05 trillion over the seven fiscal years from FY 2018–19 onward. For FY 2025–26, LNG imports are projected at BDT 510 billion.
More than BDT 350 billion in subsidies were provided to the gas sector to finance LNG imports during this period. Petrobangla spent a substantial portion of the Gas Development Fund on LNG purchases. In addition, the corporation faced severe financial strain after borrowing heavily from various foreign agencies to purchase LNG.
The recently dissolved interim government had appointed Muhammad Fouzul Kabir Khan as adviser to the power and energy ministry. That government repealed special laws governing the power and energy sectors and formed a National Review Committee to investigate alleged irregularities and corruption involving India’s Adani Group. It also initiated steps to reduce electricity tariffs. However, these measures failed to curb financial losses in the power sector. Despite longstanding criticism over costly LNG imports, Fouzul Kabir Khan did not reduce dependence on the fuel. Instead, the former interim government followed the previous Awami League’s footstep by increasing LNG imports to maintain stability in energy supply— even surpassing imports of previous years.
Anu Muhammad, an economist, told Bonik Barta: “The import-dependent energy policy has essentially been designed to create business opportunities for a select group. The way this master plan for the power sector was formulated — and by whom — has been deeply humiliating for us as a nation. No Bangladeshi experts were included. This master plan is a grand arrangement for a debt-driven, import-dependent energy system. The Sheikh Hasina government implemented it to favour certain countries, so that it could extend its hold on power and keep major nations satisfied.”
“After the Awami government’s fall, there were expectations the interim government would move away from import-dependent energy policies and formulate plans aligned with national interests,” Anu Muhammad added. “It’s deeply unfortunate that the interim government couldn’t break away from the plans left behind by Sheikh Hasina. Instead, it has further intensified import dependence. At the same time, it has created instability in the energy sector, awarded contracts without tenders and protected the interests of various groups. Import dependence has expanded to such an extent that whenever war or conflict erupts in supplier countries, Bangladesh’s energy security immediately faces heightened risk.”
The country has failed to develop adequate gas storage infrastructure to manage such vulnerabilities. Significant investment in LNG infrastructure has also not materialised. As a result, industries, power plants, residential consumers and the CNG sector continue to suffer from gas shortages, with broader repercussions for the national economy. Although several well-drilling initiatives have been undertaken at different times to ease the gas crisis, they have yet to yield results.
At least 26 offshore blocks in Bangladesh’s deep sea area remain largely unexplored. Following maritime boundary settlements with India and Myanmar, Myanmar discovered substantial gas reserves within its waters. Bangladesh, however, invited bids over an extended period but failed to attract meaningful exploration responses from foreign companies.
Experts say achieving energy self-reliance will require substantial investment. However, the past Awami League government prioritised constructing power plants while allocating limited resources to exploration.
The country now has nearly 7,000 megawatts of coal-based power generation capacity. To operate these plants, Bangladesh imports coal worth at least BDT 170 billion annually. Although significant coal reserves exist in five domestic mines, political indecision has prevented their extraction. Imported coal continues to fuel these power plants.
A form of stagnation has characterised the energy sector since the 1990s, said Maqbul-e-Elahi Chowdhury, who served for many years at state-owned Petrobangla, BAPEX and the Bangladesh Energy Regulatory Commission (BERC), including as managing director of BAPEX from 2001 to 2003.
“After the 1990s, a certain inertia set in,” he told Bonik Barta. “There was insufficient financial investment in the very fuel on which the country’s economy stands. At the same time, the previous Awami League government remained focused on imports. Over the past two decades, excessive conservatism prevailed in gas exploration. A section of business interests exploited this situation. They presented imports as the only solution to the country’s gas challenges. These factors lie at the core of today’s crisis in the energy sector.”
Another expert observed that policymakers in recent years showed little interest in gas exploration, operating under the assumption that the country lacked sufficient reserves to justify investment. “They failed to understand that an economy can’t be sustainably built on imported gas,” the expert said.
Energy expert and geologist Professor Badrul Imam told Bonik Barta: “Maintaining an economy and industrial infrastructure on imported energy has always been challenging. For a long time, we have been unable to undertake any major exploration drive. There appears to be a persistent reluctance toward exploration. A mindset has taken hold that gas won’t be found in Bangladesh. There has been no farsighted planning. We’re now paying the price for that. We must move out of this situation.”