Tk 42,600 Crore Subsidy Pressure on Four Key Sectors

Bangladesh may need to provide an additional Tk 42,600 crore in subsidies for oil, gas, electricity, and fertilizer sectors in the outgoing 2025-26 fiscal year due to ongoing conflicts and volatility in the global energy market, Finance Minister Amir Khasru Mahmud Chowdhury told Parliament.

He provided the information on Tuesday in response to a starred question from ruling party MP SM Jahangir Hossain of Dhaka-18 constituency.

The question asked whether Bangladesh had faced any economic or trade losses due to the recent conflict in the Middle East.

Responding, the finance minister said recent conflicts in Iran and other parts of the Middle East, along with instability in the global energy market, have increased pressure on government subsidy spending in oil, gas, electricity, and fertilizer sectors. According to preliminary estimates, these four sectors alone may require an additional Tk 42,600 crore in subsidies by June of FY2025-26.

He said the additional subsidy requirement includes around Tk 10,258 crore for the oil sector, Tk 11,170 crore for gas, Tk 19,821 crore for electricity, and Tk 1,350 crore for fertilizer.

The minister said that recent instability in Iran and the wider Middle East has created both immediate and potential risks for Bangladesh’s economy. He said the impact is visible mainly in energy, fertilizer, import costs, transportation expenses, inflation, foreign exchange management, remittances, and overseas employment.

He added that rising international prices of oil, LNG, and fertilizers have increased import and production costs. Higher fuel prices may also indirectly push up costs in the power, transport, agriculture, and industrial sectors, adding pressure on market prices and inflation.

Amir Khasru Mahmud Chowdhury said the Middle East remains one of the main employment destinations for Bangladeshi migrant workers. Prolonged instability in the region could therefore also pose risks to foreign employment and remittance inflows.

He said the government is closely monitoring the situation and has already taken several measures. These include diversifying energy import sources, strengthening domestic gas exploration, ensuring stable supply of essential goods, exercising caution in foreign exchange management, and exploring new labor markets.

He also said the government is fully prepared to address any potential economic risks.