[🇧🇩] Energy Security of Bangladesh

[Saif]

Can the new government break Bangladesh's energy paradox?

The new minister of power, energy and mineral resources is facing his first test to ensure energy security as the whole world reels from the shock of the Strait of Hormuz closure.

www.thedailystar.net

Can the new government break Bangladesh's energy paradox?
Dr Khondaker Golam Moazzem

The new minister of power, energy and mineral resources is facing his first test to ensure energy security as the whole world reels from the shock of the Strait of Hormuz closure. Several initiatives have already been announced to address any short-term supply shock. The minister must also prepare for medium-term challenges if the Hormuz closure continues beyond March. On the other hand, the global energy crisis and price volatility of major fossil fuels, including crude oil and liquefied natural gas (LNG), could bring opportunities to explore alternative energies, particularly renewable energy-based power generation and electrification.

In Bangladesh, renewable energy is often framed as a distant aspiration. Something futuristic, desirable, yet perpetually just out of reach. This narrative, while common, is misleading. Renewable technology exists, it works under local conditions, and it is commercially viable. Solar home systems, rooftop solar under net metering, and small-scale renewable projects have already proven this. The real barriers lie not in technology, but in structural, institutional, and political-economic factors. At the heart of the problem is the dominance of fossil fuels in the country’s energy market. As long as fossil fuel-based projects remain more profitable, less risky, and heavily supported institutionally, renewables will struggle to compete. Banks, investors, and industry actors follow incentives and guaranteed returns. Fossil fuel projects often benefit from mechanisms such as capacity payments, long-term guarantees, and public subsidies—security that renewable energy projects rarely enjoy. In this context, expanding renewables is directly linked to phasing out fossil fuels: the faster fossil fuels retreat, the greater space renewables can occupy.

Bangladesh’s energy transition debate has also been overly focused on macro-level policy targets. National plans, aspirational targets, and international declarations are necessary but insufficient. What is missing is engagement at the meso and micro levels, within institutions, infrastructure planning, financing mechanisms, and operational decision-making. Without reform and participation at these levels, policy remains rhetorical rather than transformative.

The institutional architecture itself is a barrier. Major energy institutions from planning bodies to utilities were designed around fossil fuel systems. Their norms, procurement practices, technical standards, and performance metrics reflect this legacy. Expecting these institutions to deliver a clean energy transition without restructuring is unrealistic. Institutional reform is not peripheral—it is central to scaling up renewable energy.

This structural bias becomes visible in the gap between policy rhetoric and reality. Documents such as the Integrated Energy and Power Master Plan (IEPMP) and the Energy and Power Sector Master Plan (EPSMP) emphasise clean energy and decarbonisation. Yet, the internal projections and investment pathways remain overwhelmingly fossil fuel-centric. This inconsistency sends confusing signals to investors and undermines confidence in renewable energy projects.

Technical and human capacity constraints further exacerbate the problem. Most graduates entering the energy sector are trained in fossil fuel-based systems. Many lack orientation towards renewables, and some even carry an implicit bias against it. Within institutions such as the Bangladesh Power Development Board (BPDB), this translates into hesitation or outright resistance to renewable energy initiatives. Capacity-building is therefore not just about skill development, but also about reshaping institutional culture.

Fiscal and structural incentives also discriminate against renewables. Fossil fuel plants can be sited almost anywhere and connected to the grid with minimal cost, often subsidised via public funds. Renewable projects, by contrast, are frequently located in remote areas where grid connectivity is expensive and left to private investors. Tax benefits, subsidies, and other policy privileges further tilt the playing field towards fossil fuels, making renewables appear less attractive despite their long-term economic and environmental benefits.

The banking sector reflects a similar risk-averse mindset. Banks prioritise guaranteed returns and avoid perceived risks. Many renewable energy projects lack assured payments if electricity dispatch is uncertain, so banks remain reluctant to finance them.

All of these dynamics are reinforced by a powerful fossil fuel nexus—a close relationship between segments of the private fossil fuel industry and certain state institutions. In some cases, high-level energy decisions are influenced by this nexus. This distorted political economy actively resists energy transition, regardless of policy declarations.

Foreign influence complicates the situation further. Some external actors exert disproportionate influence over Bangladesh’s energy strategies, steering priorities towards fossil fuel finance, hydrogen, or carbon capture technologies. While international engagement is important, national energy policy must remain sovereign and aligned with domestic needs.

Even foreign direct investment (FDI) in renewables faces hurdles. International investors typically prefer incremental entry with low-risk projects. Bangladesh has not yet created such entry points, expecting instead large-scale investments upfront, a mismatch that discourages participation.

The renewable energy discourse also needs recalibration. Too much focus remains on utility-scale projects, while distributed renewables like rooftop solar and mini-grids receive less attention. Yet, evidence shows these decentralised systems are growing rapidly. Net metering has more than doubled in recent years, and the overall renewable capacity is expanding quietly but steadily. Bangladesh’s energy transition is happening but in forms that are often overlooked.

The private sector’s role is crucial. Industries like RMG, textile, leather, and even fossil fuel businesses can drive renewable energy expansion if they actively participate. The RMG sector can invest in rooftop solar, deploy electricity generation projects for factories, and integrate renewables into industrial processes. Employee training and awareness programmes can further scale up green initiatives. The leather industry, meanwhile, can generate biogas or bioenergy from waste, use solar or bioenergy for electricity and heat, and invest in rooftop solar to enhance energy efficiency. Fossil fuel businesses can diversify into renewables, promote biofuel or solar-electric hybrid policies, and incorporate renewables into trading and distribution networks.

Through such investments and technology adoption, the private sector can play an entrepreneurial, market-driven role in scaling renewable energy in Bangladesh. Businesses are uniquely positioned to bridge gaps left by institutions and public policy.

The renewable energy narrative in Bangladesh must shift. Policies must become more transparent and nationally owned, media engagement must be sustained, and a new generation of renewable energy experts and journalists must emerge. Energy transition is not a one-off story; it is a long-term, ongoing process that demands sustained attention.

Bangladesh no longer needs generic energy planners. It needs bold renewable energy leaders, within the government, industry, and civil society, who can drive innovation, secure investment, and ensure that clean energy becomes the foundation of a sustainable future. The challenge is to remove structural, institutional and political barriers, and to empower businesses and communities to lead the charge.

Against this backdrop, CSOs are looking forward to bold and concrete steps from the new minister and state minister of power, energy and mineral resources to ensure sustainable energy transition in the next five years. To build a resilient and future-ready energy sector, the new government should prioritise the following measures: i) adopt a structured and time-bound plan to gradually phase out inefficient, high-emission conventional power plants, creating space for scaling up renewables while ensuring energy security and system stability; ii) invest substantially in grid modernisation, including transmission and distribution upgrades and the development of smart grid systems to effectively integrate variable renewable energy sources; iii) review and withdraw discriminatory fiscal and policy measures that disadvantage renewable energy, ensuring a level playing field for investors; iv) introduce diversified and innovative financial instruments to support distributed renewable energy across households, industries, agriculture and commercial sectors; and v) undertake comprehensive institutional reforms to strengthen governance, coordination, and regulatory capacity, ensuring a coherent and just energy transition.

Dr Khondaker Golam Moazzem is research director at the Centre for Policy Dialogue (CPD).​

 

[Saif]

What the government must prioritise to tackle power and energy challenges

Unless Bangladesh makes efforts to control power generation costs, price hikes alone will not significantly minimise the subsidy burden.

www.thedailystar.net

What the government must prioritise to tackle power and energy challenges
Shafiqul Alam

FILE ILLUSTRATION: BIPLOB CHAKROBORTY

Having taken office at a critical juncture for Bangladesh, the newly elected BNP government faces some pressing challenges. Among the immediate tasks it needs to deal with is addressing the growing power and energy demands, tackling which will require careful planning and fiscal prudence. Several interrelated issues underscore the situation: rising summer power demand during Ramadan and peak irrigation; the country’s heavy import dependency that exposes it to energy supply disruptions and price volatility; the need to address the International Monetary Fund’s (IMF) concerns over power and energy subsidies under its $5.5 billion loan programme; and the imperative to avoid sharp tariff hikes that could undermine the competitiveness of the country’s export-oriented apparel industry.

It is in this context that the new government must translate its election manifesto pledge—raising renewable energy capacity from its current five percent to 20 percent by 2030—into concrete action, particularly by working towards attracting investors.

Bangladesh generally experiences a surge in peak power demand every summer due to rising temperatures. Last year, however, was an outlier, when the country saw a dip in peak power demand, resulting from lower temperatures in April 2025 compared to April 2024, and 62.9 percent more precipitation than usual in May 2025. In addition, many industries had suspended operations because of financial challenges.

With early signs of an uptick in power demand in January-February this year, Bangladesh will likely require higher generation levels this summer. Research by the Institute for Energy Economics and Financial Analysis (IEEFA) shows that between January 19 and February 18 this year, peak power demand soared up to 6.5 percent compared to the same period last year. With the ongoing irrigation season coinciding with Ramadan, and as temperatures rise further in March, this trend may intensify.

Therefore, the new government should consider formulating a power supply rationing plan without affecting industries and businesses to safeguard economic activities. With the Bangladesh Power Development Board’s (BPDB) payment backlog to private power producers exceeding Tk 25,000 crore, the government also needs to clear dues to avoid massive power supply disruptions.

With growing geopolitical tensions that may result in surging fuel prices in the international market, the government must also work towards developing an ecosystem that encourages judicious energy use across the country. This could include motivating households, industries and businesses to adopt efficient appliances and working on bringing in behavioural changes among people. To that end, the Sustainable and Renewable Energy Development Authority (SREDA) should plan and execute national awareness-raising campaigns on energy efficiency and conservation. Additionally, rationalising high import duties on components of efficient appliances would help reduce upfront costs and make them affordable. Meanwhile, government offices should work to implement the SREDA-developed benchmark energy consumption standards for different appliances at all levels.

Dilemma over IMF pressure to raise power tariffs

The BPDB incurred an aggregate revenue shortfall of Tk 55,600 crore in FY2024-25, driven by a loss of about Tk 5 per kilowatt-hour (kWh). The government covered the lion’s share of this loss, injecting subsidies worth more than Tk 38,600 crore. The IMF reportedly prescribed that Bangladesh reduce this hefty subsidy by 2028 as part of its evaluation of the $4.7 billion loan facility approved in January 2023 to support the country’s macroeconomic stability. In June 2025, IMF extended the loan to $5.5 billion.

So far, Bangladesh has received $3.6 billion in five tranches. The sixth was deferred pending the formation of an elected government, alongside a call to raise power tariffs to minimise subsidies. However, IEEFA’s ballpark estimate shows that cutting the current subsidy by even 50 percent will require the BPDB to raise the average bulk electricity selling price for distribution utilities by more than 25 percent and adjust the retail price. This may adversely affect the country’s apparel sector.

For instance, the textile industry, with a sanctioned load of 5MW operating for 12 hours a day, pays roughly Tk 10.935 per kWh, which is around 6.4 percent less than its Vietnamese counterpart. This is calculated based on the peak and off-peak power tariff and demand charge of Bangladeshi industries connected to a 33kV line and peak, off-peak, and standard tariffs of Vietnamese industries.

The new government will need to consider a rational adjustment for industry. This is especially relevant for the apparel sector, which accounts for more than 80 percent of the country’s export earnings. Moreover, instead of passing all costs on to the consumers, the government must focus on enhancing energy efficiency and reducing wastage. For instance, by limiting losses due to leakage and pilferage, which amount to more than 7,000 crore cubic feet per annum, Bangladesh may slightly reduce capacity payments by redirecting part of this saved gas to independent power producers (IPPs) operating at lower capacity, thereby reducing the power generation cost.

Besides, the government can refrain from adding new fossil fuel-fired plants and catalyse the uptake of cost-competitive renewable energy that will help limit costs by replacing expensive peaking power plants during the day. In the medium term, it should explore the South Asian region’s vast hydro potential, such as in Nepal, building on its 40MW power trade agreement with the nation. Simultaneously, the country could explore the feasibility of exporting surplus power to Nepal during the winter season, when hydropower generation falls.

Unless Bangladesh makes efforts to control power generation costs, price hikes alone will not significantly minimise the subsidy burden.

Attracting renewable energy investment

New investments in the renewable energy sector almost stagnated in 2025 due to a lack of new projects. Prior to this, the sector had roughly attracted investment worth $238 million per annum on average. The new government’s intention to expand renewable energy capacity to 20 percent by 2030 should help accelerate the annual flow of investment by 4.1 times compared to the previous trend. This will necessitate mobilising private and international capital at scale, for which a viable project pipeline is key.

The government must urgently engage with key renewable energy stakeholders, including investors and financiers, to identify and resolve barriers to investment. Unless these concerns are resolved, the renewable energy sector’s growth will likely remain sluggish, and the country will fall short of its 2030 goal. Once the government overcomes these initial challenges, it will have scope to manoeuvre the energy and power sector through well-devised plans, backed by funding allocations in the upcoming budget for FY2026-27.

Shafiqul Alam is lead energy analyst for Bangladesh at the Institute for Energy Economics and Financial Analysis (IEEFA).​

 

[Saif]

Fuel rationing and national reality

The war between Iran on one side and the United States and Israel on the other is wreaking havoc on the global energy market. With the Strait of Hormuz facing disruption, the ripple effects are being felt far beyond the Middle East since this narrow passage carries a third of the world's liquefied

thefinancialexpress.com.bd

Fuel rationing and national reality

FE
Published :
Mar 07, 2026 23:42
Updated :
Mar 07, 2026 23:42

The war between Iran on one side and the United States and Israel on the other is wreaking havoc on the global energy market. With the Strait of Hormuz facing disruption, the ripple effects are being felt far beyond the Middle East since this narrow passage carries a third of the world's liquefied natural gas and a significant share of its crude oil. Countries heavily dependent on imported energy are particularly vulnerable and Bangladesh is no exception. Nearly all of the petroleum used in the country is brought in from abroad, much of it passing through the very waters now threatened by conflict. Brent crude has already climbed past $90 per barrel as traders respond to the growing risk of supply disruption and analysts warn it could soon breach the $100 threshold. The result has been a sudden surge of anxiety among consumers that is already surfacing in visible ways. Long queues at filling stations and a rush by motorists to refill their tanks show how quickly uncertainty can turn into panic buying. Such behaviour is understandable in times of uncertainty, yet it can quickly create the very scarcity that people fear.

It is within this context that the authorities have introduced limits on fuel purchases at filling stations. Motorcycles are allowed only a small quantity of petrol each day, private cars a slightly larger amount while public transport vehicles and freight carriers are allocated higher limits based on their operational needs. Understandably, controlled distribution ensures that fuel reaches the largest number of users and prevents a small group of consumers from monopolising supply through hoarding. It also helps preserve fairness in access to a resource that is essential for transportation, agriculture and commerce. The rationing system is not a solution to the underlying problem but a necessary bridge to get through a period when supply cannot keep pace with demand.

The scale of the squeeze becomes clear when tracking what each spike in global oil prices does to the national treasury. Every time prices climb by $10 a barrel, Bangladesh ends up paying roughly $80 million more each month for fuel imports. The liquefied natural gas situation is even more unsettling. Spot market prices have nearly doubled lately and the government is set to spend over Tk 23 billion on just two cargoes, more than double what those same shipments would have cost only a month ago. When prices rise this sharply the burden inevitably filters through the economy in the form of higher operating costs for industry, increased transport fares and more expensive food. The strain on energy supplies is already forcing difficult trade-offs. Five fertiliser factories have been temporarily shut down so that gas can be diverted to power generation. Soon enough, the government may have little choice but to consider additional conservation measures such as distance learning and work from home arrangements to further reduce fuel consumption.

If this crisis has revealed anything, it is how vulnerable the country remains. Bangladesh built its growth model on imported fossil fuels assuming the global supply chains would always stay open and the fuel would always keep flowing. Any economy that relies on other countries for something as basic as energy will always be vulnerable to trouble brewing somewhere far away. Right now, the urgent tasks are making rationing work, scouring markets for alternative supply options and calming public nerves. But there is also a longer-term lesson that cannot be ignored. Real energy security means being able to generate power from sources that cannot be blockaded. The sooner the country turns toward what it can control at home the less it will dread whatever crisis comes next.​

 

[Saif]

15 vessels that left Strait of Hormuz before conflict reach Chittagong Port

Fifteen ships that crossed the Strait of Hormuz and the Gulf of Oman before the United States and Israel launched attacks against Iran have started arriving at Chattogram port. These vessels had already crossed the strait and set sail for Bangladesh before any announcement of its closure.

en.prothomalo.com

15 vessels that left Strait of Hormuz before conflict reach Chittagong Port

Masud Milad
Chattogram
Published: 07 Mar 2026, 12: 45

The vessel Al Jassasiya carrying LNG reaches the waters of Chittagong Port on 5 March 2026. Photo taken from MarineTraffic.com

Fifteen vessels that crossed the Strait of Hormuz and the Gulf of Oman before the United States and Israel launched attacks against Iran have started arriving at Chittagong Port. These vessels had already crossed the strait and set sail for Bangladesh before any announcement of its closure.

Among the vessels that have reached the port or are on the way to Chattogram, four are carrying liquefied natural gas (LNG), two are carrying liquefied petroleum gas (LPG), and nine are carrying clinker, a raw material for the cement industry. Altogether, the 15 vessels are carrying about 750,000 tonnes of cargo. Of them, 12 vessels have already reached the port, while the remaining three are expected to arrive this week.


On 28 February, the situation around the Strait of Hormuz became tense following a joint attack by the United States and Israel on Iran and Tehran’s retaliatory response. As a result, nearly one-fifth of the world’s oil and LNG supply has come under risk.

Bangladesh imports and exports goods with seven countries using the Strait of Hormuz: Iraq, Iran, Qatar, Kuwait, Bahrain, the United Arab Emirates, and Saudi Arabia. Due to the war situation, transportation through the Gulf of Oman from the neighbouring country Oman has also come under risk. Ships travel from the Persian Gulf through the strait, then through the Gulf of Oman, the Arabian Sea, the Indian Ocean and the Bay of Bengal to reach Bangladesh.

According to Chattogram port data, two vessels named Al Zour and Al Jassasiya carrying 126,000 tonnes of LNG from Qatar have already arrived at Chattogram port. In addition, a vessel named Sevan carrying LPG is scheduled to arrive tomorrow, Sunday. Two more vessels—Al Galayel on Wednesday and Lusail on Monday—are expected to reach the port waters. Altogether, these four vessels are carrying about 247,000 tonnes of LNG. The ships crossed the Strait of Hormuz two to seven days before the conflict began after departing from Ras Laffan port in Qatar.

The vessel Sevan carrying LPG is scheduled to reach the Chittagong Port on 8 March 2026. Photo taken from MarineTraffic.com

Md Nurul Alam, senior deputy general manager of Uni Global Business Limited, the local representative of the LNG vessels, told Prothom Alo today, Saturday, that the arrival of the four ships at Chittagong Port is almost certain. However, another LNG carrier named Liberal is still inside the Strait of Hormuz. The vessel has already loaded LNG and is waiting to cross the strait. There is uncertainty regarding the next consignments.

To avoid supply shortages amid the war situation, the government has also purchased LNG from the open market at higher prices through two vessels, which have not yet reached the port.

Another vessel Sevan carrying LPG is scheduled to arrive at Chittagong Port on Sunday. The vessel is carrying 22,172 tonnes of LPG from Sohar port in Oman. Earlier, another tanker GYMM carrying 19,316 tonnes of LPG from the Sohar port reached the Chattogram port before the war began. The two ships together are carrying about 35,000 tonnes of LPG for Meghna Fresh LPG, a subsidiary of Meghna Group of Industries.

In addition, vessel Bay Yasu carrying 5,000 tonnes of monoethylene glycol (MEG) from Shuaiba port in Kuwait reached the port last Thursday.

Several other vessels carrying clinker, gypsum, limestone and stone—raw materials for the cement industry—have also arrived at Chittagong Port. These ships are carrying about 515,000 tonnes of raw materials imported from the Gulf region.

Sources concerned said that in the 2024–25 fiscal year, Bangladesh imported goods worth nearly USD 6 billion from these countries through the Strait of Hormuz, a large portion of which were energy products. However, if the situation around the strait does not return to normal, uncertainty may arise regarding the arrival of new vessels.​

 

[Saif]

Iran war threatens a prolonged hit to global energy markets

The war with Iran could leave consumers and businesses worldwide facing weeks or months of higher fuel prices even if the week-old conflict ends quickly, as suppliers grapple with damaged facilities, disrupted logistics, and elevated risks to shipping.

www.thedailystar.net

Iran war threatens a prolonged hit to global energy markets

The war with Iran could leave consumers and businesses worldwide facing weeks or months of higher fuel prices even if the week-old conflict ends quickly, as suppliers grapple with damaged facilities, disrupted logistics, and elevated risks to shipping.

The outlook poses a wider global economic threat, as well as a political vulnerability for U.S. President Donald Trump leading into the midterm elections, with voters sensitive to energy bills and unfavorable to foreign entanglements.

"The market is shifting from pricing pure geopolitical risk to grappling with tangible operational disruption, as refinery shutdowns and export constraints begin to impair crude processing and ‌regional supply flows," JP Morgan analysts said in a research note on Friday.

The conflict has already led to the suspension of around a fifth of global crude and natural gas supply, as Tehran targets ships in the vital Strait of Hormuz between its shores and Oman, and attacks energy infrastructure across the region.

Global oil prices have surged 24% this week to over $90 a barrel and are on course for their steepest weekly gains since the pandemic, driving up fuel prices for consumers worldwide.

A nearly complete shutdown of the Strait means the region's giant oil producers - Saudi Arabia, the United Arab Emirates, Iraq and Kuwait - have had to suspend shipments of as much as 140 million barrels of oil - equal to about 1.4 days of global demand - to global refiners.

As a result, oil and gas storage at facilities in the Middle East Gulf are rapidly filling, forcing oil fields in Iraq to cut oil production and Kuwait and the United Arab Emirates most likely to cut next, analysts, traders and sources said.

"At some point soon, everyone will also shut in if vessels do not come," said a source with a state oil company in ⁠the region, who asked not to be named.

Oilfields forced to shut in across the Middle East as a result of the shipping disruptions could take a while to return to normal, said Amir Zaman, head of the Americas commercial team at Rystad Energy.

"The conflict could be ended, but it could take days or weeks or months, depending on the types of fields, age of the field, the type of shut in that they've had to do before you can get production back up to what it once was," he said.

Iranian forces, meanwhile, are targeting regional energy infrastructure - including refineries and terminals - forcing them to shut down too, with some of those operations badly damaged by attacks and in need of repairs.

Qatar declared force majeure on its huge volumes of gas exports on Wednesday after Iranian drone attacks and it may take at least a month to return to normal production levels, sources told Reuters. Qatar supplies 20% of global LNG.

Saudi Aramco’s mammoth Ras Tanura refinery and crude export terminal, meanwhile, has also closed due to attacks, with no details on damage.

The White House has justified the attack on Iran saying the country posed an imminent threat to the United States, although it has not provided details. Trump has also said he was concerned about Iran's efforts to obtain a nuclear weapon.

DANGER IN THE STRAIT

A quick end to the war would soothe markets. But a return to pre-war supply and pricing could take weeks or months depending on the extent of the damage to infrastructure and shipping.

"Considering physical damage due to Iranian strikes, so far we have not seen anything that would be considered structural, although the risk remains as long as the war continues," said Joel Hancock, energy analyst, Natixis CIB.

The biggest question for energy supplies is how and when the Strait of Hormuz will become safe to ‌shipping again. Trump has ⁠offered naval escorts to oil tankers and promised U.S. insurance support to vessels in the region.

But safety in the waterway may be elusive, as Iran has the capacity to sustain drone attacks on shipping for months, intelligence and military sources have said.

The conflict could also encourage countries to top up their strategic petroleum reserves in the weeks and months after the conflict ends, by exposing the dangers of thin inventories. That would increase demand for oil, and support prices.

GLOBAL ECONOMIC, POLITICAL RISK

In the meantime the disruption in energy shipments is reverberating through supply chains and economies in import-reliant Asia, which sources 60% of its crude oil from the Middle East.

In India, state-run Mangalore Refinery and Petrochemicals (MRPL.NS), declared force majeure on gasoline export cargoes, sources said this week, joining a growing number of refineries in the region unable to fulfill sales contracts due to lack of supply.

At least two refineries in China have cut runs. China, a big supplier to the region, has asked refineries to suspend fuel exports. Thailand has ⁠also suspended fuel exports, while Vietnam has suspended crude shipments.

Disruption has given Russia a boost. Prices for Russian crude cargoes have risen as the U.S. has given Indian refiners a 30-day waiver to buy Russian crude to substitute for lost Middle East supply. Washington had pressured India to cut Russian oil imports under the threat of tariffs.

In Japan, the No.2 global LNG importer, baseload power futures for Tokyo for the fiscal year starting in April jumped more than a third this week on the EEX in anticipation of higher fuel prices. And in Seoul, drivers queued up at petrol stations in anticipation of rising pump prices.

For European consumers, the crisis in gas supplies and ⁠the higher prices are a double whammy. The region was hit the hardest by the disruption to gas supplies due to sanctions on Russian energy imports after Russia invaded Ukraine in 2022.

Europe turned to LNG imports to substitute for Russian pipeline gas. And Europe now needs to buy 180 more LNG cargoes than it did last year to fill gas storage to the levels needed before next winter.

The supply risks to the United States are fewer, as the country has grown in recent years into the world’s largest oil and gas producer. But U.S. crude and fuel prices rise in tandem with ⁠international crude markets, so pump prices for gasoline and diesel are affected even if domestic supply is plentiful.

U.S. average retail gasoline, for example, hit $3.32 a gallon nationally on Friday, up 34 cents over last week, according to AAA. Diesel prices, meanwhile, hit $4.33 a gallon, up from $3.76 a gallon a week ago.

Higher prices at the pump mark a major risk for Trump and his fellow Republicans as they head into midterm elections in November.

"Gasoline prices are psychologically powerful," said Mark Malek, chief investment officer at Siebert Financial. "They are the inflation number that consumers see every single day."​