US trade deal limits Bangladesh's access to cheaper fuel options: Debapriya
He said the limitations are unfolding alongside a broader fuel crisis, which is already putting pressure on the economy.
Provisions under the US-Bangladesh trade agreement are limiting Bangladesh's ability to access cheaper energy sources, economist Debapriya Bhattacharya has said, warning that the restrictions are reducing flexibility at a time of global price volatility.
Speaking at a dialogue titled "Thoughts on the First Budget of the New Government", organised by the Citizen's Platform for SDGs Bangladesh in Dhaka today (31 March), he said the country's energy import strategy is increasingly constrained by external policy conditions.
"Clauses related to sanctions alignment and 'non-market country' considerations have created a situation where accessing cheaper alternatives such as Russian oil requires a formal waiver from the United States," he said.
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"This has reduced our procurement flexibility at a time when global energy prices remain volatile."
He said the limitations are unfolding alongside a broader fuel crisis, which is already putting pressure on the economy.
According to Bhattacharya, rising fuel prices are expected to increase Bangladesh's annual energy import costs by $4.8 billion, or around 1.1% of GDP, potentially widening the current account deficit.
Higher import costs are also increasing demand for foreign currency, adding pressure on the taka, he said.
"Compounding the situation, any instability in the Gulf region could disrupt remittance inflows, which account for roughly half of our total remittances and serve as a key stabiliser of the balance of payments," he added.
Bhattacharya said the energy shock is taking place within a constrained policy environment, limiting the government's ability to respond effectively.
He warned that without careful management, these constraints could intensify broader macroeconomic risks, affecting fiscal stability and external balance.
