[🇧🇩] Energy Security of Bangladesh

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The Financial Express | First Financial Daily of Bangladesh

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Policy support for generating more solar power

Mushfiqur Rahman

Published :
May 14, 2026 23:41
Updated :
May 14, 2026 23:41

Bangladesh government has been trying to accelerate renewable energy- based power generation for diversifying primary energy sources. Bangladesh remains significantly behind its regional neighbours in renewable energy use. As reported, India, Pakistan, Vietnam and Thailand have considerably expanded their solar, wind and hydro energy use for power generation to reduce fossil fuel dependence and to secure diversification of energy sources. On the contrary, Nepal and Bhutan have been successfully harnessing hydroelectricity as the main sources for power.

Minister for Ministry of Power, Energy and Mineral Resources, Iqbal Hassan Mahmud informed the media (May7, 2026) that the government was set to introduce new policy framework to accelerate solar energy expansion and attract investment in renewable energy following Prime Minister's directive. The minister further informed that the government had been working on a simplified framework for importing solar power generation equipment including solar PV panels, inverters, frames etc., to reduce tax burden on investors in renewable energy sector, and also set out enabling conditions in the policy so that battery storage technology for electricity will be encouraged and solar energy can support evening peak hour demands in the country. It is expected that the government would finalise the 'new policy' document within May 2026, approve it by June 2026. Bangladesh has a target for 10,000 MW renewable energy-based power generation within next five years. Energy Minister further expressed the hope that the new policy would help expand rooftop solar power generation with the participations of private investors in the major cities. He expected that policy support from the government would help create a profitable market for investors while easing pressure on grid connected electricity supply.

Bangladesh Chamber of Industries (BCI) leaders consider that the country has fallen into an 'energy trap' by increasing heavy dependence on fossil fuel imports and delays in transition to renewable energy. It was opined in a seminar organised by the BCI in Dhaka on May 10, 2026. BCI President Anwar-ul-Alam Chowdhury considers that 'the growing dependence on imported fossil fuels has become one of the country's biggest economic vulnerabilities, as it exposes the economy to global shocks and forces the government to spend nearly $12 billion annually on fuel imports.'

Published reports suggest that the country's primary energy imports surged from 47.7 to 62.5 per cent between the fiscal year 2020-2021 and 2024-2025. And the average power generation costs increased from BDT 6.61/kWh to BDT 11.33/kWh between FY 2020-2021 and 2022-2023. Cost of fuel has a major role in increasing power generation costs. Against the global average of 33.8 per cent renewable energy share for grid connected power generation, Bangladesh has only 2.3 per cent share for the same.

Experts believe that delays in land allocation, weak financing, tax burdens on solar power generation equipment and batteries and absence of sovereign guarantees for the renewable energy based power generation facilities (solar and wind parks) remain as major impediments for private investment growth for the sector.

In the global arena, fossil fuel supply chain disruptions and uncertainties due to US-Israel and Iran war have been pushing global shifts from oil and gas to clean energy sources. The 1970's oil shocks compelled the industrialised economies to reduce reliance on oil supply dependent on OPEC cartel and enhance energy efficiency, focus on nuclear energy, introduction of electric vehicles, mass communication networks (metro, electric trains etc). The recent Persian Gulf crisis has already pushed the soaring demands for electric vehicles to offset oil and gas-based vehicles. As the renewable energy options are tested alternatives, countries of the world including in Southeast and South Asia have been rapidly expanding their solar, wind and hydropower generation capacities.

The Guardian (May 3, 2026) reported that Vietnam decided to shelve a massive LNG terminal development project and planed for substituting it with renewable energy projects. In India, solar accounted for 9 per cent of Indian electricity generation last year (up from 0.5 per cent a decade ago). Indian consumer market has been witnessing strong demand for 'electric three wheelers'. China, already the leading manufacturer of electric vehicles, solar PV panels, batteries and other accessories for solar and wind power generation has taken commendable lead in renewable energy towards faster transition to clean energy.

Mushfiqur Rahman is a mining engineer, He writes on energy and environment issues.​

 

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Different tactics in power price hike: Lower middle class to face greater pressure

According to the PDB proposal, this may create additional billing pressure on 35 per cent of electricity consumers. Of them, 23 per cent belong to the lower middle class and use less than 200 units of electricity per month. Such consumers generally use electricity at home to regularly run...

en.prothomalo.com

Different tactics in power price hike: Lower middle class to face greater pressure

Mohiuddin
Dhaka
Updated: 12 May 2026, 10: 20

Representational image File photo

Bangladesh Power Development Board (PDB) has adopted a new tactic in its proposal to increase electricity prices. Alongside raising prices, the agency wants to increase revenue by changing the billing slabs for residential consumers. If the proposal is implemented, a large section of consumers may lose the benefit of using electricity at lower rates. Besides, the PDB also wants electricity prices to be adjusted twice a year.

According to the PDB proposal, this may create additional billing pressure on 35 per cent of electricity consumers. Of them, 23 per cent belong to the lower middle class and use less than 200 units of electricity per month. Such consumers generally use electricity at home to regularly run multiple lights, fans, refrigerators and televisions.

Currently, among residential consumers, those using up to 50 units per month are considered lifeline consumers. This is the slab for the lowest electricity users, who mainly use lights and one fan. Consumers using up to 75 units fall under the first slab. According to the proposal, electricity prices for lifeline and first-slab consumers will not increase. However, consumers using more than 75 units of electricity will have to come under higher pricing.

Currently, consumers using 76 to 200 units fall under the second billing slab. The PDB has proposed changing this slab to cover zero to 200 units. That means consumers will no longer get the lower-rate benefit for the first 75 units. According to PDB calculations, this change may generate an additional Tk 26.57 billion in annual retail revenue. The PDB is also looking for multiple ways to increase revenue from the Bangladesh Rural Electrification Board (REB).

PDB officials say the government does not want to increase electricity prices for poor people. Therefore, instead of raising prices for the first two categories, a proposal has been made to change the slab starting from the second tier.

The impact of the PDB proposal can be understood from the bill calculation of a consumer using 200 units of electricity per month. Under the current system, the first 75 units are billed at the first slab rate of Tk 5.26 per unit. This amounts to Tk 394.50. The remaining 125 units are billed at the second slab rate of Tk 7.20 per unit, adding another Tk 900. Altogether, the bill at the current rate stands at Tk 1,294.50.

However, if the PDB proposal is implemented, the entire 200 units will be calculated at the second slab rate. In that case, even without an increase in electricity prices, the consumer’s bill will rise to Tk 1,440. That means the bill will increase by Tk 145.50 solely due to the slab change.

Along with this, the PDB has also proposed increasing the second slab rate. It wants to raise the price from Tk 7.20 per unit to Tk 8.20 per unit. If implemented, the electricity bill for a consumer using 200 units per month will rise to Tk 1,640. That means the monthly bill will increase by Tk 345.50. In addition, demand charges and VAT will be added to the bill.

Electricity bill for the poor not increasing

PDB officials say the government does not want to increase electricity prices for poor people. Therefore, instead of raising prices for the first two categories, a proposal has been made to change the slab starting from the second tier. As a result, those who use more electricity will no longer receive the lower-rate benefit of the first slab.

People concerned from the power sector said there has been little initiative to reduce electricity production costs.
However, people concerned from the power sector said the PDB should first reduce its own unreasonable expenses.

Instead, it is trying to collect extra money from consumers. Slab-based benefits in bills exist specifically for lower electricity users. Similarly, tax rates in income tax are determined according to slabs. Even second-tier taxpayers receive the benefits of the first slab.

According to PDB data, there are more than 43.1 million residential electricity consumers in the country. Of them, 43 per cent are lifeline consumers who use up to 50 units. Another 22 per cent use up to 75 units. However, 10,153,862 consumers use between 76 and 200 units. The remaining four slabs consist of consumers using more than 200 to 600 units of electricity (12 per cent).

Electricity billing slabs were mainly introduced to benefit lower electricity users. Nothing can be said immediately about changing slabs. The technical committee will submit a report, after which the issues will be discussed during hearings.
BERC Chairman Jalal Ahmed

PDB Chairman Rezaul Karim told Prothom Alo that due to financial shortages, fuel (oil and coal) cannot be purchased and payments to power plants cannot be made. The deficit cannot be resolved even by reducing costs. The price of the US dollar has increased by nearly 50 per cent over the past few years. Fuel prices are also higher. Therefore, a proposal has been made to adjust electricity prices. The proposal to change residential electricity slabs has also been made to reduce the deficit. The Bangladesh Energy Regulatory Commission (BERC) will review these matters.

Proposal to adjust prices every 6 months

On 3 May, the Power Division sent a letter to the BERC for electricity price adjustment. It said that due to the ongoing Middle East situation, the cabinet committee decided on 27 April to adjust wholesale and retail electricity tariffs.

It was decided to increase wholesale prices by 21 per cent (Tk 1.5 per unit) and accordingly raise retail prices and send a proposal with slab changes.

Following this, the PDB submitted its proposal to the BERC on 4 May. It proposed increasing retail prices alongside wholesale rates. Later, five other distribution companies also proposed price adjustments in line with wholesale prices.

On 5 May, the BERC took the matter into consideration and formed a technical committee. The commission has scheduled hearings for 20 and 21 May. The PDB has proposed implementing the increased prices from 1 June.

To regularly adjust electricity prices, the PDB has also proposed fixing electricity prices for the next several years under a multi-year tariff system. This would allow consumers to prepare in advance with prior expectations.

In addition, the PDB has proposed automatically linking fuel costs with wholesale electricity prices. A formula has been proposed for this purpose. If fuel prices increase or decrease, wholesale electricity prices will also rise or fall. The PDB has proposed adjusting this every six months.

BERC Chairman Jalal Ahmed told Prothom Alo that electricity billing slabs were mainly introduced to benefit lower electricity users. Nothing can be said immediately about changing slabs. The technical committee will submit a report, after which the issues will be discussed during hearings. However, the commission will decide on all proposals considering consumer interests.

No visible effort to reduce costs

People concerned from the power sector said there has been little initiative to reduce electricity production costs. During the previous Awami League government, generation capacity was increased to double demand, which also raised capacity charges or rental payments to power plants. Agreements with these power plants were made under the special powers law without tenders.

The previous interim government repealed the law. After that, a national committee was formed to review all contracts made under that law. The national committee submitted its report in January. Last month, the current government formed another committee to review the contracts again.

The national committee’s report said the government is purchasing electricity at abnormally high prices: 40 to 50 per cent higher at furnace oil-based power plants, 45 per cent higher at gas-fired plants, and 70 to 80 per cent higher in the solar power sector. These are not market prices, but the result of contracts. If reforms are not carried out, the country will sink.

Energy adviser of the Consumers Association of Bangladesh (CAB), M Shamsul Alam, told Prothom Alo that the government is allowing opportunities for looting instead of reducing costs, while shifting the burden onto consumers by showing a deficit crisis. The PDB may propose price adjustments, but it cannot prescribe strategies to fill the deficit.

There is no scope to consider the proposal to change electricity bill slabs. This is a matter of government policy, not a hearing issue. These proposals mean putting additional pressure on the lower middle class, he added.​

 

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Proposed power tariff hike and pertinent issues

Inflation is resurging once again after a brief respite, raising serious concern among people in lower-income brackets about the cost of living. Prices of almost all essential commodities have gone up, and all modes of transportation have become costlier since the government increased fuel prices l

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Proposed power tariff hike and pertinent issues

Atiqul Kabir Tuhin

Published :
May 17, 2026 00:03
Updated :
May 17, 2026 00:03

Inflation is resurging once again after a brief respite, raising serious concern among people in lower-income brackets about the cost of living. Prices of almost all essential commodities have gone up, and all modes of transportation have become costlier since the government increased fuel prices last month. Now, in a move that is bound to aggravate inflationary pressure, the Bangladesh Power Development Board (PDB) and other transmission and distribution utilities are reportedly pushing for electricity price increases between 17 and 21 per cent.

The Bangladesh Energy Regulatory Commission (BERC) is scheduled to hold two separate public hearings on bulk and retail electricity prices on May 20 and May 21, respectively. If past experience is anything to go by, such public hearings are mere formalities before going for the hike.

Raising power tariffs once or even twice a year was routine during the Awami League government. The interim government didn't increase the tariff during its 18-month tenure. Then, the energy minister of the incumbent BNP government also assured the public in February that the government would prioritise reducing system losses, curbing irregularities, and cutting unnecessary expenditure instead of burdening consumers with higher tariffs. The current move to raise electricity prices therefore appears surprising and contradictory to the government's earlier commitments.

True, Bangladesh's heavy dependence on imported primary fuels for electricity generation such as furnace oil, LNG, and coal makes domestic pricing highly vulnerable to international shocks. Global energy market volatility following the Middle East conflict has further increased the cost of power production. There is also pressure from the IMF to reduce subsidies. The government's subsidy burden in the power sector is on track to reach about Tk 430 billion in the current fiscal year. Against this backdrop, the government may consider raising the tariff. But an increase in electricity prices does not mean only higher monthly utility bills for households. It will also raise production costs for industries, increase irrigation expenses for farmers, and push up costs in transportation and cold storage operations. The ripple effects will inevitably spread throughout the economy, driving up the prices of goods and services.

Energy sector experts therefore are of the view that the government should focus on reducing production cost by addressing the flawed policies of the Awami League government. In January this year, a national committee, formed by the interim government to review unsolicited power contracts signed during the Awami League regime, found that inflated capacity charges had been costing Bangladesh up to $1.5 billion annually. The committee warned that unless contracts with the private power plants are renegotiated, the country could face about $7.2 billion in excess payments over the remaining lifespan of the deals.

It is therefore hoped that the government will conduct a comprehensive review of all existing power purchase agreements (PPAs) and assess their fairness and economic viability, while gradually phasing out capacity payments. It is also crucial to examine why over 40 per cent excess power generation capacity was created and who has been benefiting from it. Any move to increase power tariffs without correcting the past policy missteps would amount to facilitating plundering of state resources, while passing the burden onto consumers.

At the same time, increasing power generation from local energy sources such as gas, coal, and solar is crucial to reduce dependence on costly imports. Exploration of new gas fields, along with the extraction of coal from existing reserve, should be given priority to ensure long-term energy security and price stability. A sustainable power generation strategy based on domestic resources is essential not only for reducing production costs, but also for long term stability of the power sector.​

 

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West Asia conflict pushes Bangladesh energy costs up by Tk 400b: Finance minister

Finance Minister Amir Khosru Mahmud Chowdhury has said the West Asia conflict has increased Bangladesh’s fuel oil and gas import costs by around Tk 400 billion, warning that the country is going through “very difficult times”. On Saturday, he pointed at disruption in the Strait o

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West Asia conflict pushes Bangladesh energy costs up by Tk 400b: Finance minister

bdnews24.com

Published :
May 16, 2026 15:32
Updated :
May 16, 2026 21:52

Finance Minister Amir Khosru Mahmud Chowdhury has said the West Asia conflict has increased Bangladesh’s fuel oil and gas import costs by around Tk 400 billion, warning that the country is going through “very difficult times”.

On Saturday, he pointed at disruption in the Strait of Hormuz.

Speaking during an event at Chattogram Maa O Shishu General Hospital in Agrabad, he said it had affected shipping routes and fuel supply chains, forcing Bangladesh to raise domestic fuel prices despite efforts to stabilise the market.

“You think I am sitting on a treasury as finance minister, ready to write cheques and money will appear. It is not that simple,” he said.

He added that around Tk 400 billion had already been absorbed from the budget due to higher fuel and gas costs linked to the conflict.

“Everything we inherited from the [Awami League] government was minus, minus and minus. There is nothing positive. Everything is negative debt. We now have to make that up,” he said.

Khosru also said around Tk 500 billion in unpaid bills remained in the power and energy sectors from previous administrations, which the BNP government was now forced to clear.

“So we are in a deeply negative financial position. First we must recover from this, then the economy will move forward. I have already said it will take two years for the economy to stand back on its feet,” he added.

Tensions spiked in West Asia following a Feb 28 joint strike by Israel and the United States on Iran, which triggered counterattacks across Gulf countries hosting US military bases.

Turning to healthcare, he said the government had launched a major initiative to expand services and significantly increase budget allocation.

He said universal preventive and primary healthcare is a basic right, but many citizens have been deprived of it.

He added that the government plans to involve private hospitals in treating low-income patients, with costs covered by the state, citing limitations in public facilities.

The minister, however, warned that budget increases alone would not improve services without proper implementation and accountability.

“Earlier allocations in health mostly went to corruption. People did not receive services. This time, we must ensure proper use through coordination,” he said.​

 

[Saif]

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Fuel supply normalises amid regional crisis
Increased imports from regular suppliers ease oil shortages

M AZIZUR RAHMAN

Published :
May 17, 2026 08:30
Updated :
May 17, 2026 08:30

Bangladesh's fuel supply situation has largely returned to normal despite ongoing volatility in global energy markets triggered by the Middle East crisis and restrictions on shipping through the Strait of Hormuz.

Increased imports from regular suppliers and higher oil cargo arrivals have helped stabilise petroleum product distribution across the country since early this month.

Officials say the government is now focusing on strengthening strategic fuel reserves to prevent future supply disruptions, while long queues at petrol pumps and restrictions on commercial activities have gradually disappeared.

Although state-run Bangladesh Petroleum Corporation (BPC) issued notifications of award (NOA) to around a dozen new suppliers under the direct purchase method (DPM), none of them had supplied oil to the country until May 16, BPC Chairman Md Rezanur Rahman told The Financial Express on Saturday.

He said only a couple of the newly awarded companies had deposited the required performance guarantee (PG) to fulfil their commitments to supply petroleum products to BPC.

Some companies declined to submit the performance guarantee even after securing contracts, while others failed to proceed with supply arrangements after receiving the NOAs, the BPC chairman said.

If the companies that submitted the guarantees proceed as planned, the first oil supplies under the DPM contracts are expected to reach Bangladesh in June, he added.

A&A Energy Oil & Gas LLC of the United States, Petrogas International Corporation of the UAE, AP Energy Investments Ltd of the Netherlands, Steller Marketing and Trade LLC of the United States, Superstar International (Group) Ltd of Hong Kong, Exxon Mobil Kazakhstan Inc, Abeer Trade & Global Markets of Malaysia, Archer Energy LLC of the United States, Maxwell International SPC, Yar Energy of Switzerland, Aka Energy Ltd of the United Kingdom, Mazda Oil Company Ltd of Japan, VSM Bio FZ LLC of the UAE and Pacific Silverline Ltd of Nigeria were among the firms selected to supply petroleum products to Bangladesh under the initiative.

The BPC chairman said regular suppliers that had previously deferred oil cargoes or declared force majeure after the outbreak of the war had now resumed deliveries to BPC. As a result, the country's overall petroleum product imports have increased since early April, improving fuel supply and distribution across the country, he said.

"We imported around 27 oil cargoes in April, which is nearly 50 per cent higher than the usual monthly import volume," he said, adding that BPC normally imports about 18 cargoes a month. The country's sole crude oil refinery, Eastern Refinery Limited, has also resumed full-scale operations after importing 100,000 tonnes of crude oil in early May, he said.

Another 100,000-tonne crude oil cargo is expected to arrive within the next several weeks to keep refinery operations running smoothly, he added.

The BPC chairman acknowledged that Bangladesh faced an immediate fuel crisis after the Middle East war began on February 28 due to insufficient petroleum reserves.

"Afterwards, we became more cautious and are using the current ceasefire period to build up our oil stocks," he said. "We are working to ensure at least three months' worth of oil reserves in the country to avoid unforeseen supply shocks in the future," Mr Rahman added.

Apart from using BPC's own storage facilities and those of its subsidiaries, the corporation also plans to store fuel in tanks belonging to power plants, the railway sector and other available facilities.

Despite rising international oil prices, BPC is continuing to purchase petroleum products using its own funds, he said.

He added that financing support from the International Islamic Trade Finance Corporation is also helping Bangladesh procure fuel from global suppliers.

Bangladesh has long imported crude oil from Saudi Aramco and Abu Dhabi National Oil Company.

BPC also imports refined petroleum products through government-to-government arrangements from suppliers including Kuwait Petroleum Corporation, PETCO Trading Labuan Company Limited, Emirates National Oil Company (Singapore) Pte Ltd, PetroChina (Singapore) Pte Ltd, PT Bumi Siak Pusako, Unipec Singapore Pte Ltd, PTT International Trading Pte, Numaligarh Refinery Limited and OQ Trading Limited.

Sources said long queues at petrol pumps have disappeared since early this month, while restrictions on shopping mall operating hours have also been relaxed. "I do not know where so many customers have gone," said Petrol Pump Owners Association Convener Sazzadul Karim Kabul.

He said daily sales of petrol and octane had fallen to one-fifth of previous levels.

"Usually, we sold around 10,000 litres of petrol and octane combined each day. Now sales have dropped to around 2,000 litres a day," he said.

Mr Kabul alleged that the long queues seen in recent months had been created intentionally.

"Many people rushed to stockpile petrol and octane," he said, adding that large volumes of fuel remain stored in vehicle tanks, reducing demand at filling stations.

He added that petrol and octane sales would return to normal once the excess stored fuel is gradually consumed.​

 

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‘Can't sacrifice farmland’: PM’s ICT Adviser sets conditions for renewables expansion

Prime Minister's Adviser on Telecom and ICT Rehan Asif Asad on Sunday stressed the need for a balanced long-term energy strategy for Bangladesh, warning that expanding renewable energy must not come at the cost of agricultural land. “Renewable energy (RE) is crucial for Bangladesh's future.

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‘Can't sacrifice farmland’: PM’s ICT Adviser sets conditions for renewables expansion

UNB

Published :
May 17, 2026 23:07
Updated :
May 17, 2026 23:07

Prime Minister's Adviser on Telecom and ICT Rehan Asif Asad on Sunday stressed the need for a balanced long-term energy strategy for Bangladesh, warning that expanding renewable energy must not come at the cost of agricultural land.

“Renewable energy (RE) is crucial for Bangladesh's future. Our agriculture is also important. We cannot expand renewable energy by sacrificing arable land,” the adviser said at a seminar titled “Renewable Energy in the Upcoming Budget: Expectations and Realities,” organised by the Centre for Policy Dialogue (CPD) at a city hotel.

Asad, who holds degrees in electrical and nuclear engineering from the Massachusetts Institute of Technology (MIT), said energy is one of the key drivers of national development and that sustainable economic growth depends heavily on proper planning and predictability in the sector.

Citing an example from Rajshahi, he said solar panels placed directly on farmland had negatively affected crop output, prompting authorities to relocate them to rooftops of irrigation pumps, an arrangement that proved more effective. “Agriculture is the backbone of our economy. We cannot promote renewable energy by damaging farmland and putting food production at risk.”

The adviser highlighted nuclear power as one of the most reliable electricity sources and noted that fresh nuclear fuel has already begun arriving at the Rooppur plant.

He cautioned, however, that large-scale nuclear projects require seven to ten years from construction to power generation and demand careful long-term planning.

He also pointed to significant advances in nuclear technology over the past two decades, particularly the development of small modular reactors capable of generating between 55 MW and 500 MW, which he said could be well-suited to countries like Bangladesh.

On energy storage, Asad said the government is reviewing possible reductions in taxes and VAT on lithium-ion batteries to make the technology more affordable.

The CPD study presented at the same event had earlier flagged that lithium-ion batteries currently face a total tax incidence of 61.80 percent in Bangladesh, the highest among key renewable energy components.

Regarding electric vehicles, he said the global automotive industry views EVs as the future but cautioned that Bangladesh must first assess the impact of mass EV adoption on the national grid. “Without strengthening charging networks and grid capacity, importing more EVs could create new challenges.”

The adviser acknowledged that discussions are ongoing on whether tax exemptions and incentives should be extended to the renewable energy sector, but said every such decision must be made carefully given the country's limited fiscal space.

He noted that Bangladesh's tax-to-GDP ratio stands at approximately 6.5 percent, among the lowest in the world, compared to 11 to 14 percent in neighbouring Southeast Asian countries. “Every decision regarding tax exemptions, VAT reductions or incentives must be made cautiously to ensure maximum national benefit within limited fiscal capacity.”

Asad expressed hope that some of the recommendations discussed at the event would find reflection in the upcoming national budget. “The government is working toward a holistic approach covering renewable energy, electric vehicles, battery storage technology and overall electricity demand management.”

The CPD seminar was moderated by Research Director Khondaker Golam Moazzem. A study titled “Renewable Energy in the National Budget 2026-27: Overshadowed by Fossil Fuels?” was presented by Programme Associate Md. Khalid Mahmud. Prime Minister's Adviser on Finance and Planning Rashed Al Mahmud Titumir attended as chief guest.​

 

[Saif]

Revisiting our marine energy resources

So far Bangladesh has been just sitting on its vast unexplored and unexploited maritime resources within its territorial sea as well as the 200 nautical miles (nm) of Exclusive Economic Zone (EEZ). It has also its sovereign rights over the continental shelf that extends up to 350 nm. Notably, 1 nau

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Revisiting our marine energy resources

SYED FATTAHUL ALIM

Published :
May 17, 2026 23:40
Updated :
May 17, 2026 23:40

So far Bangladesh has been just sitting on its vast unexplored and unexploited maritime resources within its territorial sea as well as the 200 nautical miles (nm) of Exclusive Economic Zone (EEZ). It has also its sovereign rights over the continental shelf that extends up to 350 nm. Notably, 1 nautical mile is approximately equivalent to 1.5 miles or 1.85 kilometers (km). That means despite a small land area to sustain a disproportionately large population, Bangladesh has at least a sizeable maritime zone to turn to. And the time had never been so critical as now to re-examine in a fresh light the immense possibilities that our maritime resources hold. We would at the moment concentrate on the undersea fossil energy resources.

But this does not mean that other non-living and living resources including deep seaports, ecotourism, fisheries, marine biotechnology, etc., have less potential. However, of late, the nation has tumbled to a new reality. It is about its extreme vulnerability to disruptions in the global energy supply lines, thanks to the energy shock attributable to the latest war in the oil-producing Middle East. It is not that the governments that came before the incumbent one were not aware of Bangladesh's vulnerability on the energy issue. Unfortunately, the last political government that ruled the country for more than a decade and a half devised an energy policy that was totally dependent on import knowing full well that it was unsustainable. In fact, after 2006, no serious effort was made from the governments to explore fresh gas fields in the country. The governments in question relied mainly on the import of fuel oil and Liquefied Natural Gas (LNG) as it was easier than going for the hard work of exploring and exploiting our own fossil energy resources lying under the ground and the sea. As it involved a lot of cash transactions to import gas and oil from the Gulf countries, there were prospects of huge sums of kickbacks to line the pockets of those in power. In consequence, in just eight years, the government of the time imported only LNG worth Tk 2.45 trillion. Thus started the depletion of the state exchequer by a government that was supposed to protect it. So, far as exploration of the potential offshore fossil fuel reserves are concerned, the state-owned national oil and mineral company, Petrobangla, divided the offshore territory in the Bay of Bengal into 26 blocks following the resolution of our maritime boundary in 2012 (with Myanmar) and in 2014 (with India) respectively. Of those, 11are in the shallow and 15 in the deep sea. The post-2008 history of offshore contracting is marked by unfavourable fiscal terms and dispute over gas pricing. Also, changes in contract frameworks led to eventual retreat of the international oil companies (IOCs).

Following the Model Production Sharing Contract (PSC), which was drafted to accelerate offshore energy exploration in the Bay of Bengal, the US Multinational firm ConocoPhillips signed a PSC for two deep-sea blocks (Blocks 10 and 11). The company completed a 2D seismic survey but ultimately withdrew in 2014-15 over the price of gas that the company asked, which the government of the time refused. After resolution of the maritime boundary disputes with Myanmar and India by the International Tribunal for the Law of the Sea (ITLOS), Indian joint venture, 'Oil and Gas Corporation S(ONGC) Videsh Ltd (OVL) and Oil India Ltd (OIL) signed PSCs for two shallow sea blocks (SS-04 and SS-09) in 2014. The Indian joint venture did not start work until 2019 but left as they reportedly could not find gas in one well while the other block they did not go for drilling. Meanwhile, the Australian firm Santos Ltd and Singapore-based KrisEnergy formed a joint venture to explore the shallow block SS-11, while South Korea's Posco Daewoo Corporation was awarded the deep-sea block DS-12 in 2017. These contracts too fell through as the Australian and Singaporean companies left after reportedly assuming losses. The Korean company, too, withdrew since the government did not agree to their request for gas price hike. Following the failures to contract out the offshore gas blocks, in 2023, the Bangldesh Offshore Model PSC 2023 was approved. This model permitted a higher annual cost recovery ceiling and linked gas prices to the international Brent crude market. But despite aggressive marketing for 24 offshore blocks to attract 55 global energy giants, the response of the IOCs was lukewarm. However, the American multinational ExxonMobil showed its interest in the deep-sea Block-15 and submitted its proposal accordingly, but the government rejected it. The interim government that assumed power following July uprising of 2024, also invited bidding from IOCs. But again they showed little interest considering perhaps the short tenure of the interim admin. It is now believed that the incumbent BNP-led elected government would not waste time to exploit offshore energy resources. In this connection, the Cabinet Committee on Economic Affairs (CCEA) on May 7 in principle gave approval to the framework for offshore oil and gas exploration, titled the 'Bangladesh Offshore Model Production Sharing Contract (PSC) 2026'. It is hoped that the barren era of the last two decades would now be over. The power, energy and mineral resources minister Iqbal Hasan Mahmud Tuku is learnt to have informed that soon international tender would be floated for offshore energy exploration in the Bay of Bengal. Of the country's total 29TCF of gas reserves, 22.11 TCF has already been exploited. That leaves us with 7.63 TCF which can support the country for the next 12 years assuming a usage rate of 1,700 million cubic feet per day (mmcfd). So before the existing gas reserves are emptied, an all-out effort has to be made to discover new energy deposits in the Bay.

The government is learnt to have started executing short-term workover/ drilling programmes such as deepening of select wells in the onshore Titas field to immediately push more gas into the national grid. Alongside necessary short-term steps, long-term measures should be aggressive expansion of domestic gas exploration, diversification of supply sources (for import), exploitation of nuclear energy potential as well as harvest of the country's abundant tropical sunshine. More than a grand strategy, what we need most at the moment is a set of selfless and dedicated leadership as policymakers to resolve all our issues including energy. That is how Japan, for instance, got industrialised without having much natural resources including energy.​