Bangladesh energy crisis worsens as LNG prices surge

Bangladesh is facing a severe energy crisis characterized by soaring liquefied natural gas (LNG) costs and widespread electricity shortages. The country is currently paying spot prices exceeding $28 per unit, more than double the rates seen prior to recent geopolitical escalations in the Middle East. This price surge follows disruptions to long-term supplies, including a force majeure declaration from Qatar's Ras Laffan facility.

The crisis is compounded by domestic infrastructure failures. Technical issues and a fire at Excelerate Energy’s Floating Storage and Regasification Unit (FSRU) in Moheshkhali have significantly reduced regasification capacity. Consequently, domestic gas supply remains below the national demand of 2,650 mmcfd.

The shortage has triggered rolling power outages and forced industrial cutbacks in sectors such as garments, food, ceramics, and medicine. Manufacturers report that rising production costs and unreliable energy supplies are squeezing profit margins and threatening export deadlines. To mitigate the impact, some companies are increasing rooftop solar capacity and investing in energy-efficient machinery. Economically, the crisis is expected to cause energy subsidies to reach between $2.5 billion and $4 billion by FY26.