From crisis to capacity: Building Bangladesh’s energy resilience

A couple of weeks ago, while passing through Agargaon, I noticed a long queue of vehicles, stretching the full length of the road all the way to the Mirpur Road junction. The line must have been more than a kilometre long. 

It was not a routine queue. It was panic buying. People were filling up whatever they could, terrified by the news of fuel shortages following the latest escalation in the Middle East. 

As I sat in traffic and watched anxiety unfold before my eyes, I realised that we had been warned for years but probably never truly expected it to happen like this.  

The warnings are now impossible to ignore. Bangladesh meets 95% of its oil and nearly half of its gas requirements through imports. When the conflict escalated in early March 2026, QatarEnergy invoked force majeure on LNG supply contract with Petrobangla on 2 March. 'OQ Trading' followed on 5 March. Excelerate Energy on 6 March.

In the span of four days, Bangladesh lost confirmed supply from suppliers responsible for 63% of its LNG imports. 

Petrobangla floated an emergency tender for spot LNG cargoes. 

The first attempt drew zero bids. The second secured one cargo at $28 per MMBtu from Gunvor and another at $24 per MMBtu from Vitol, two and a half times what the same cargoes cost on 1 March.

Simultaneously, the disruption to crude oil shipments through the Strait of Hormuz forced BPC to pursue emergency direct procurement for April's diesel supplies. Diesel spot prices surged from $85-90 to between $143 and 172 per barrel within days.

Four fertiliser plants shut down and universities closed citing Ramadan. The government contemplated sector-wise power and fuel rationing amidst a deteriorating global energy situation. Call it panic, but those Agargaon fuel lines were a reality check, exposing the fragile margin between a functioning city and a full-blown crisis.

This crisis did not happen overnight; it has been years in the making. 

Every year, Bangladesh spends around $1 billion just to bring in petroleum. We are importing roughly 7 million tonnes of it, and because our refining capacity stalled, 80% of that arrives as high-premium refined state from the Middle East, Singapore, Malaysia and India, many of which in turn depend on crude transported through the Strait of Hormuz.

Eastern Refinery (ER) in Chattogram, the country's sole oil refinery, can process only 1.5 million tonnes of crude per year, covering just 20% of national demand. Bangladesh's domestic gas reserve has been declining at approximately 5% per annum, and the gap has been filled by imported LNG.

In 2025, Petrobangla imported 109 LNG cargoes and has planned 115 for 2026, with QatarEnergy alone scheduled to supply 40 of them. The cumulative import bill since 2018 stands at $17.6 billion.

Renewable energy, meanwhile, accounts for barely 5.25% of Bangladesh's installed capacity of 30,787 MW. We have spent a decade building a power infrastructure. We have not built the energy security to sustain it.

The immediate response

In the next six to 12 months, the priority is managing the exposure without triggering an economic shock. Three steps matter most.

First, supply diversification for both petroleum and LNG must be accelerated now rather than after the next crisis. The India-Bangladesh Friendship Pipeline already delivers diesel from Numaligarh Refinery at a fixed premium of $5.50 per barrel well below emergency spot rates.

That route should be activated at scale immediately, alongside accelerated procurement from Malaysia, Australia and Angola, suppliers that do not depend on the Strait of Hormuz. 

The spot market will remain the fallback, but managing it proactively, through longer-term alternative contracts before the next crisis, is far less costly than emergency procurement at $28 per MMBtu. 

On crude, progressing the ER expansion project will add three million tonnes of domestic refining capacity by 2027, directly reducing dependence on refined product imports.

Second, merit-order dispatch in power generation must be strictly enforced, prioritising the most fuel-efficient plants and curtailing oil-fired generation, which currently accounts for a disproportionate share of costs relative to output. 

Third, enhance demand-side energy efficiency through incentives and regulatory audits. For example, SREDA's mandatory energy audits for large industrial consumers need to move from policy documents into active enforcement. These are not difficult measures. They require institutional discipline more than money. These are not complicated measures. They require institutional discipline more than capital.

The long game: Diversification and capacity building

No short-term supply management strategy eliminates the structural risk as long as Bangladesh remains predominantly an energy importer. The transition to decentralised, domestically generated power, at scale, might be the only durable answer, and the resources to do it are already here.

Beyond ground and rooftop solar, the most compelling untapped asset is floating solar on Bangladesh's vast water bodies, offering massive power potential without sacrificing a single acre of precious farmland. 

An IFC study screening 323 water bodies identified 11 GWp of floating solar potential. Broader estimates, accounting for the country's 1,500 km² of ponds alone, put the figure at 15 GW from just one-third of that area without touching a single acre of agricultural land. 

Bangladesh has already switched on its largest floating solar plant, a 2.3 MW facility on a fish pond in Chapainawabganj supplying a nearby rice mill. That is the model at small scale. The Renewable Energy Policy 2025, published in June of last year, sets a target of 20% renewable energy by 2030 and 30% by 2040, and BPDB has already floated tenders for 52 solar plants with a combined capacity of 5,200 MW.

The architecture is in place. What is needed is the execution speed.

Vietnam offers the clearest proof that rapid deployment is achievable. In 2020 alone, they installed 9.58 GW of rooftop solar driven by a feed-in tariff of $0.0838 per kWh, combined with income tax and land lease exemptions for developers.

Bangladesh has comparable solar irradiation and a far larger rooftop area across garment factories, industrial buildings and government facilities. What it lacks is an equivalently clear and credible incentive structure. 

Resolving the conflict between the Renewable Energy Policy 2025 and the Integrated Energy and Power Master Plan, which still prioritises LNG over renewables as the primary growth fuel is the most important single policy decision the government can make to unlock private investment in this space.

On the domestic gas side, upstream exploration has been chronically underfunded. The government's annual development allocation for the entire energy sector is roughly $170 million, a fraction of what Petrobangla spends on LNG in a single month.

Accelerating both onshore and offshore exploration, on transparent terms that attract international oil companies, is not an alternative to the renewables transition. It is the bridge that sustains supply while solar and regional hydropower from Nepal and Bhutan's rivers scale to meaningful levels. 

Petrobangla's plan to drill 100 wells by 2028 could add 170 mmcfd to the grid, a helpful boost, but far from enough to bridge the massive supply gap. While a 2024 BAPEX survey in Bhola hinted at a massive 5 TCF find, there's only a 10% chance of confirming those reserves. We should keep exploring, but we can't just bet the country's future on a geological gamble that has historically underdelivered.

To move beyond this gas-dependent trap, Bangladesh must shift toward a diversified energy mix that prioritises utility-scale renewables and grid-connected energy storage. Scaling up floating solar and coastal wind power isn't just an environmental goal; it's a strategy to hit the government's target of generating 20% of the nation's electricity from renewable sources by 2030. 

This shift is the only way to build resilience in an energy sector that is not vulnerable to the price shocks of imported fossil fuels or the uncertainty of local drilling.

A shared responsibility

Energy security is not a problem the government can solve alone and framing it as one has been part of how the risk accumulated. The responsibilities are genuinely shared across three actors.

For the government, acting as ecosystem builder rather than a subsidy provider, must resolve its internal policy conflicts, slash solar import barriers, and mandate merit-order dispatch. Incentivizing efficiency is just the start; the goal is to deploy smart pricing that pushes consumers to shift their energy use from peak to off-peak hours, finally bridging every planning document into one coherent national strategy. 

For industry, Rooftop solar is no longer a sustainability 'nice-to-have;' it is now a commercial imperative. In Bangladesh, solar costs now rival gas at current import prices, and relying on a grid-only strategy has become a risk most businesses can no longer afford to take. 

Efficiency is no longer an elective; it's a survival requirement. As global buyers put the energy cost of every shipment under a microscope, Bangladeshi manufacturers can no longer afford the luxury of thermal waste or inefficient, power-hungry production lines.

For citizens, the fuel queue at Agargaon or other places is a clear signal that energy is expensive, finite, and no longer reliably available on demand. Switching to energy-efficient appliances, adjusted consumption habits during peak hours, and the cultural shift toward treating electricity as a resource rather than a utility, these matter collectively, even if individually they seem small.

The decision to be made

Bangladesh has now lived through two LNG price shocks of 2022 and 2026 and both times the response has been reactive, expensive and temporary. The question is not whether the next disruption will come. It is whether, when it does, we will be standing in front of a transformed energy mix or still standing in a fuel queue.

The solar potential is real. The refinery expansion is underway. The pipeline from India is operational. The regional connectivity with Nepal and Bhutan's hydropower is a viable strategic option. We can no longer afford to fix our energy problems one cargo at a time. 

What we need is a shared national mission, a conviction across every level of society that energy security is not just a policy issue, but an existential necessity. The plan is on the table; the data is in our hands. What remains is the will to execute before the pumps run dry again.

Sabbir Ahmad is an engineering and corporate leader with extensive global experience in digital connectivity, energy infrastructure, and sustainable development. He can be reached at sabbir@ieee.org.