Having to buy LNG, crude at double the price, says commerce minister

Commerce Minister Khandakar Abdul Muktadir says that Bangladesh is purchasing fuel at nearly double the previous prices amid an energy crisis triggered by the conflict in the Middle East.

He said, “We did not form the government with any plan for war or anticipation of such a situation, nor did we know that such havoc would arrive within 15–16 days. You need to have an idea of (the scope of) that havoc.”

“LNG, which we used to buy at $10 under G2G contracts, we now have to buy from the spot market at $20. Crude oil, which we used to purchase at $50, $55, or $60, is now costing $116. Fertiliser that we used to buy at $456… we require around 2.6 million tons of urea annually. A large portion of that has to be imported because, for many years, we have not been able to keep our fertiliser factories running throughout the year due to gas shortages. The gas we cannot use domestically for fertiliser production has to be imported from abroad using foreign currency. What we used to buy at $456 is now costing in excess of $800.”

He made the remarks on Monday at a pre-budget discussion organised by the Dhaka Chamber in collaboration with private media outlets Channel 24 and Samakal at a hotel in the capital.

The minister said that due to the skyrocketing situation, it has become “difficult” for the government to formulate and manage the budget according to its priorities.

He said, “This means that the government’s manoeuvring capability—its financial cushion to spend according to its priorities—has become very limited. That space to manoeuvre has become very difficult for the government.”

However, even in such situations, the government will focus on “deregulation” to normalise economic activities, he said.

“What I want to say is—on one hand, we want to significantly deregulate and simplify processes,” he said.

“On the other hand, a major obstacle is energy. Even in these tough times, the Ministry of Energy is prioritising keeping industries operational. But one major challenge we inherited is the lack of storage capacity in Bangladesh. If we had the capacity to store LNG for two months, we would not have to buy $10 LNG at $20 from the spot market today.”

At the same time, he hoped that businesses will see “positive” outcomes in the upcoming fiscal year 2026–27 budget.

The minister said, “To bring financial discipline, we need to expand the tax base. To do that, we are not increasing individual taxes but widening the tax net. I believe the National Board of Revenue (NBR) and the Ministry of Finance are working with the right goals and intentions.

“In the upcoming budget and the following year, you will see positive results. There is no reason to fear that additional pressure will be imposed on you.”

The event was moderated by DCCI President Taskin Ahmed. General Economics Division (GED) member Monzur Hossain, ICC Bangladesh President Mahbubur Rahman, ICAB President NKA Mobin, Dhaka Stock Exchange Chairman Mominul Islam were in attendance.