Bangladesh faces up to $2.8b higher fossil fuel bill for 2026: ZCA Analysis
The higher cost could add pressure on the taka, inflation and borrowing costs as gas-dependent power generation remains exposed to global supply disruptions.
Bangladesh's fossil fuel import bill could rise by up to USD 2.8 billion in 2026, adding pressure on the country's economy and raising energy security concerns as the current supply crisis risks deepening long-term dependence on imported gas, a new analysis by international research group Zero Carbon Analytics (ZCA) showed.
ZCA estimates that the additional imported fossil fuel spending in 2026 is equivalent to the cost of installing around 8 GW of rooftop solar, enough to increase generation capacity by around 25% on Bangladesh's current 32 GW power grid.
Bangladesh's LNG imports between January and August 2026 were nearly 13% lower than during the same period in 2025.
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The sharpest decline came between July and August, when imports plunged by around 83%, from 0.63 million tonnes to 0.11 million tonnes, amid disruptions to supplies through the Strait of Hormuz.
But lower imports have not meant lower costs. If oil, gas and coal prices remain at the January–August average for the rest of the year, ZCA estimates Bangladesh's fossil fuel import bill could be around 30% higher than in 2025.
The additional cost would be equivalent to around 10% of Bangladesh's trade deficit and could add pressure on the taka, inflation and borrowing costs. If current fuel prices persist, ZCA estimates the country's import cover could fall from 5.7 to 5.2 months, it said.
Around 64% of Bangladesh's electricity generation depends on gas, leaving the power system highly exposed to LNG supply disruptions.
On 11 August, the power supply shortfall reached 3,592MW - around 20% of demand at the time.
The supply crunch is already affecting households and major industries. Some rural areas have reportedly experienced power outages lasting eight to 10 hours a day.
Bangladesh's exposure reflects its growing reliance on imported energy. In 2023, around 46% of the country's total energy supply was imported, while imports met 65% of its power needs in FY2024–25.
Nearly two-thirds of Bangladesh's LNG supplies in 2025 passed through the Strait of Hormuz.
Doubling down on imported gas
To address immediate shortages, Bangladesh has sought LNG from multiple suppliers and the spot market.
The government approved two spot LNG cargoes for August and September and procured another eight cargoes from suppliers in the UK, Australia, Malaysia and Oman. It has also sought additional diesel supplies from India.
At the same time, Bangladesh is making longer-term commitments to imported gas, including an agreement to purchase 117 LNG cargoes from the United States between 2026 and 2038.
Long-term contracts, however, do not eliminate supply risks. Three major LNG suppliers to Bangladesh have declared force majeure on contractual obligations amid the current crisis, while the International Energy Agency projects a cumulative global LNG supply loss of around 140 billion cubic metres through 2030.
ZCA's analysis points to rooftop solar as one option for reducing Bangladesh's exposure to imported fuels and international price volatility.
Renewables accounted for just over 5% of Bangladesh's electricity generation in 2025, with installed renewable capacity reaching 1.49GW.
According to IEEFA, a 1MW rooftop solar installation could save around $180,000 a year in imported fuel costs.
Bangladesh needs to add around 760MW of renewable energy capacity each year through 2030 to meet its 20% renewable electricity target. Yet only 358MW of renewable projects were under construction as of February 2026.
