The government’s subsidy for liquefied natural gas (LNG) procurement is expected to increase by 27.27% to Tk 70 billion in FY2024-25, despite five gas tariff hikes over the past six years and IMF pressure to reduce energy subsidies. In FY24, the subsidy was Tk 55 billion. Since LNG imports began in 2018, the government has spent over Tk 262.15 billion on subsidies. The rising costs are driven by import and re-gasification expenses exceeding selling prices, with additional imports from the international spot market further inflating the subsidy. Bangladesh’s overall LNG re-gasification capacity increased to around 1.10 billion cubic feet per day earlier this year. Despite recent tariff hikes, including a significant increase in January 2023, the subsidy burden continues to grow. An energy expert suggested exploring domestic hydrocarbon resources to alleviate the fiscal strain.
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