Bangladesh LNG Subsidy Hits Tk 10,300 Crore In First Three Months Of FY27: Petrobangla Data

Dhaka, September 29, 2026 — LNG subsidy disbursement for July-September FY27 reached Tk 10,300 crore, with the latest Tk 3,000 crore tranche released on September 21, according to Petrobangla. The figure underscores the mounting fiscal pressure from energy subsidies — a key concern in the IMF credit programme negotiation.

📊 LNG Subsidy Data

• 💰 July-September FY27 LNG subsidy: Tk 10,300 crore
• 💰 Latest tranche (Sept 21): Tk 3,000 crore
• 💰 Monthly average: approximately Tk 3,433 crore per month
• 💰 Annualised projection: approximately Tk 41,200 crore (if current rate continues)

💼 Context: Total Energy Subsidy

The LNG subsidy is part of Bangladesh's broader energy subsidy burden:

• 💰 FY27 power subsidy allocation: Tk 370 billion (Tk 37,000 crore)
• 💰 FY27 LNG subsidy earmark: Tk 110 billion (Tk 11,000 crore)
• 💰 Total FY27 energy subsidy allocation: Tk 480 billion (Tk 48,000 crore)
• 💰 Already disbursed (July-Sept): Tk 238 billion (Tk 23,800 crore) — including the LNG component

🌏 IMF Connection

The LNG subsidy data is directly relevant to the IMF credit programme negotiation:

• 📋 IMF July fact-finding — recommended restricting subsidies to poor households only
• 📋 IMF push — for further electricity and fuel price increases
• 📋 October IMF-World Bank meetings — in Thailand, where Bangladesh will negotiate the new $4.0-4.5 billion programme
• 📋 Subsidy rationalisation — a key condition for the IMF programme

🚧 Why LNG Subsidy Is Growing

The LNG subsidy is growing because of several factors:

• ⛽ Global LNG prices elevated — Middle East conflict keeping prices high
• ⛽ Import cost vs selling price gap — government sells LNG at subsidised rates below import cost
• ⛽ Growing LNG dependence — Bangladesh imports 7-8 million tonnes of LNG annually
• ⛽ Strait of Hormuz disruption — affecting LNG shipping routes and costs
• ⛽ Taka depreciation — increasing local-currency cost of dollar-denominated LNG imports

💼 Impact On Fiscal Position

The Tk 10,300 crore LNG subsidy in just three months has significant fiscal implications:

• 💰 Budget pressure — crowding out development spending (ADP implementation at record low 1.85%)
• 💰 Government salary hike — new pay scale from October adds further fiscal pressure
• 💰 Revenue constraints — tax-to-GDP ratio among lowest in Asia
• 💰 Borrowing needs — government may need to increase borrowing to fund subsidies

📜 Looking Ahead

For Bangladesh's energy and fiscal policy, the LNG subsidy trajectory is unsustainable without reform:

• 📝 IMF programme — will likely require concrete subsidy reduction commitments
• 📝 Tariff adjustment — further electricity and gas price increases may be needed
• 📝 Targeted subsidies — transitioning from universal to means-tested subsidies
• 📝 Domestic gas exploration — reducing LNG import dependence
• 📝 Renewable energy — diversifying away from LNG dependence
• 📝 Phulbari coalmine — developing domestic coal as alternative energy source

The coming months will be critical as Bangladesh negotiates the IMF programme — with the LNG subsidy figure of Tk 10,300 crore in three months providing clear evidence of the fiscal unsustainability of the current energy pricing model.