Budget’s fossil fuel-heavy focus threatens country’s clean energy transition: CPD
The think tank stresses the need for a policy realignment in favour of renewables
The Centre for Policy Dialogue (CPD) has raised serious concerns over the upcoming national budget for the fiscal 2025-26, which begins on 1 July, warning that the high allocation for fossil fuels threatens the country's clean energy transition and long-term sustainability.
At a dialogue titled "Power and Energy Sector in the National Budget for FY2025-26: Reflections on the Priorities for Energy Transition", held in the capital's BRAC Centre Inn today (26 June), the policy think tank stressed the need for a policy realignment in favour of renewable energy.
Bangladesh's next budget heavily funds fossil fuel imports and subsidies, while renewable energy allocations remain modest and may fall short of clean energy goals.
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To support the shift towards renewable energy, the CPD put forward a set of recommendations, such as ending tax exemptions for fossil fuel-based power projects and introducing carbon taxes and duties on the import of fossil fuel plants.
It also called for the withdrawal of all fossil fuel and LNG subsidies, while urging the prioritisation of domestic gas exploration through the Gas Development Fund.
Additional proposals included phasing out inefficient power plants, renegotiating unsolicited Independent Power Producer (IPP) contracts, expanding renewable energy projects under the Annual Development Programme (ADP), and reducing import duties and VAT on clean energy technologies.
M Shamsul Alam, an energy adviser to the Consumers Association of Bangladesh (CAB), Professor Badrul Imam of Dhaka University, BGMEA Vice President Barrister Vidiya Amrit Khan, energy expert Monower Mostafa and BKMEA Vice President Md Akhter Hossain Apurbo spoke at the event.
BAPEX, RPGCL and BPC made profits in FY25
Riding on upward revisions in fuel oil prices under the automated pricing system, state-owned Bangladesh Petroleum Corporation (BPC) made a profit of Tk2,050 crore in FY2024-25, the Centre for Policy Dialogue (CPD) said today.
CPD also forecasted that BPC's profit will decline to Tk615 crore in the upcoming FY26. Recent tensions in the Middle East between Israel and Iran have pushed global oil prices higher, which is expected to reduce BPC's profit next fiscal year.
Apart from BPC, two subsidiaries of Petrobangla — Bangladesh Petroleum Exploration and Production Company Limited (Bapex) and Rupantarita Prakritik Gas Company Limited (RPGCL) —also reported profits of Tk137 crore and Tk41 crore, respectively, for FY25. CPD attributed these profits to recent gas price increases at the industrial level.
It also forecasted that Bapex's profit in FY26 would rise to Tk258 crore and RPGCL's profit to Tk49 crore.
Explaining the reason behind the profit increase, CPD said, "The Profit of these institutions is further forecasted to rise, given the VAT exemption in LNG import and gas tariff hike."
On the other hand, the Bangladesh Power Development Board (BPDB) continues to incur losses. According to CPD's assessment, BPDB incurred a loss of Tk8,803 crore in FY25 and is forecasted to incur more losses in FY26, with the figure rising to Tk9043 crore.
