Bangladesh Energy Crisis Deepens Amid Middle East Conflict

• Global fuel supply chain disruptions from the Middle East conflict have triggered a severe energy emergency in Bangladesh.
• The government has responded with fuel rationing, early university closures, and prioritized gas allocation to maintain grid stability.
• Industries face significant production losses, while low-income households struggle with soaring cooking fuel costs.

Supply Chain Breakdown

• Three major LNG suppliers invoked force majeure following attacks on energy infrastructure, cutting off Bangladesh’s contracted supply.
• Spot market prices for LNG have surged, reaching USD 28.28 per MMBtu, nearly 2.5 times higher than previous rates.
• Officials project the loss of 40 out of 115 scheduled LNG cargoes for 2026 due to regional instability.

Impact on Industry and Infrastructure

• Gas supply for power generation dropped from 870 mmcfd to 820 mmcfd, raising concerns of widespread blackouts.
• Four out of five state-run urea fertilizer factories were shut down, threatening agricultural productivity during the Boro season.
• Textile and garment factories—which account for 84% of exports—are operating at 40–50% capacity due to daily power cuts and high diesel generator costs.

Fiscal and Social Consequences

• LPG cylinder prices surged from BDT 900 to 1,500, placing extreme strain on families earning the minimum wage of BDT 12,500.
• Fuel subsidies hit BDT 50 billion (approx. USD 407.4 million) in March alone to keep retail prices stable, straining national fiscal reserves.
• The government is seeking emergency diesel shipments from India to supplement dwindling reserves, which fell to a nine-day supply by early March.