The recent surge in the US dollar exchange rate, prompted by Bangladesh Bank’s introduction of a crawling-peg exchange rate system, is expected to lead to more frequent hikes in gas and power tariffs. This increase in the dollar rate is likely to elevate import costs for petroleum products, coal, and liquefied natural gas (LNG), posing significant challenges for the energy sector.
To offset the impact of the elevated greenback prices and government subsidy reductions, authorities are contemplating raising power tariffs four to five times a year. This move aims to gradually phase out government subsidies over the next three years, as previously shared with the International Monetary Fund (IMF). The surge in import costs, coupled with existing outstanding dues to power plant owners and international oil companies, further exacerbates the financial strain on state-owned entities such as Bangladesh Power Development Board (BPDB) and Petrobangla.
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