Iran war adds Tk36,000cr to Bangladesh's energy subsidy burden: Finance minister
Initiatives are underway to secure additional budgetary support from development partners to manage fiscal pressure and foreign currency constraints, Finance Minister Amir Khosru Mahmud Chowdhury tells parliament.
The ongoing US-Israeli war on Iran in the Middle East has triggered volatility in the global energy market, resulting in an additional subsidy requirement of Tk36,000 crore in the power and energy sector, Finance Minister Amir Khosru Mahmud Chowdhury told parliament today (10 April).
He said the conflict has had a direct impact on Bangladesh's economy, adding that the war, which began just 10 days into his tenure, has created fresh uncertainty in global energy supply chains and trade.
The minister noted that international prices of crude oil and LNG have more than doubled, meaning that between March and June of the current fiscal year, nearly Tk36,000 crore in additional expenditure will be required over the allocated subsidy for the power, energy and LNG sectors.
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Khosru said, "This has raised concerns over a widening budget deficit on one hand and mounting pressure on foreign exchange reserves on the other, driven by an estimated additional import cost of around $3 billion."
"To mitigate the situation, the government has already called for energy conservation and taken several measures, including sourcing energy from alternative suppliers and ensuring timely subsidy disbursement to maintain stable international procurement," he added.
Khosru further said initiatives are underway to secure additional budgetary support from development partners to manage fiscal pressure and foreign currency constraints.
The minister added that as an import-dependent economy, Bangladesh is not insulated from global shocks.
"However, despite rising energy prices, the government has not increased domestic fuel prices in consideration of public interest. Meanwhile, work has begun on the budget for the 2026-27 fiscal year," he said.
Khosru added that public expectations surrounding the first budget of the newly elected government are high and that the administration is committed to meeting them.
The minister said that the government's objective is not only economic growth but also building a sustainable, transparent and inclusive economy.
Khosru concluded saying that fulfilling public trust and expectations remains a key commitment of the government.
