Commerce minister says LNG and crude must be bought at nearly double the price

Commerce Minister Khandakar Abdul Muktadir has said that Bangladesh is being forced to purchase fuel at nearly double the previous rates amid an energy crisis sparked by the ongoing conflict in the Middle East.

“We did not form the government with a plan for war or any anticipation of such a situation, nor did we expect such disruption within just 15 to 16 days. One needs to understand the scale of this disruption,” he said.

The minister explained that LNG, which was previously purchased at $10 under government-to-government (G2G) agreements, now costs around $20 on the spot market. Crude oil, once priced between $50 and $60, has now surged to $116. Fertiliser, which previously cost $456 per ton, now exceeds $800. He noted that Bangladesh requires around 2.6 million tons of urea annually, much of which must be imported because domestic fertiliser plants cannot operate year-round due to gas shortages. As a result, fertiliser must be imported using foreign currency.

He made the comments on Monday during a pre-budget discussion jointly organised by the Dhaka Chamber of Commerce and Industry, Channel 24, and Samakal at a hotel in the capital.

The minister said the sharp rise in global commodity prices has severely constrained the government’s ability to design and manage the budget according to its priorities.

“This means the government’s financial flexibility—its capacity to spend according to priorities—has become very limited. That room to manoeuvre is now quite constrained,” he said.

Despite these challenges, he said the government intends to prioritise deregulation to help normalise economic activity.

“On one hand, we aim to significantly deregulate and simplify processes,” he said. “On the other hand, energy remains a major challenge. Even during this difficult period, the Ministry of Energy is prioritising the uninterrupted operation of industries. But a major structural problem we inherited is the lack of energy storage capacity. If we had the ability to store LNG for two months, we would not be forced to buy $10 LNG at $20 on the spot market today.”

The minister also expressed optimism that businesses would see positive outcomes in the upcoming 2026–27 national budget.

“To restore financial discipline, we need to broaden the tax base. This does not mean increasing individual tax rates, but rather expanding the tax net. I believe the National Board of Revenue and the Ministry of Finance are working with the right objectives,” he said.

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

The event was moderated by DCCI President Taskin Ahmed. General Economics Division member Monzur Hossain, ICC Bangladesh President Mahbubur Rahman, ICAB President NKA Mobin, and Dhaka Stock Exchange Chairman Mominul Islam were also present.