Bangladesh has approved the purchase of four spot liquefied natural gas (LNG) cargoes at prices as high as $28.03 per MMBtu, marking a substantial increase from pre-conflict levels of below $10/MMBtu. This procurement, approved by the Cabinet Committee on Government Purchase, is intended to alleviate acute gas shortages impacting the power and industrial sectors. The purchased cargoes include one from BP Singapore Pte Ltd at $28.03/MMBtu, another from Aramco Trading Singapore at $27.54/MMBtu, and a third from Vitol Asia Pte Ltd at $26.6688/MMBtu. An additional cargo from Aramco Trading Singapore, under a short-term government-to-government agreement, will cost $23.98/MMBtu.
These prices are nearly three times higher than those seen in December 2025, when LNG was purchased for less than $10.50/MMBtu. The government had previously approved LNG purchases at $24.63/MMBtu on August 24 and $23.93/MMBtu on August 17. The sharp increase in global LNG prices is primarily attributed to the prolonged conflict in the Middle East, which has disrupted production and transportation, curtailing supplies from long-term sources and forcing Bangladesh to rely on the more expensive spot market.
The persistent gas shortage has led to widespread disruptions, including frequent power cuts (load-shedding exceeding 3,500 megawatts on some days), and significant under-capacity operation for industries. The daily gas demand in Bangladesh is approximately 3.8 billion cubic feet, but only about 2.7 billion cubic feet are supplied, with LNG typically accounting for 1.05 billion cubic feet. Energy expert M Tamim suggests that while the government needs to prioritize gas supply, Bangladesh cannot afford current high LNG prices and should consider political rather than purely economic decisions, potentially using fuel oil for power generation.
Businesspeople have suggested that running oil-fired power plants could be a cheaper alternative to using imported gas for electricity generation, given current international gas prices. Electricity generated from furnace oil costs around Tk 21.51 per unit, while LNG at $24 per MMBtu would result in electricity costing more than Tk 23 per unit, rising to over Tk 26 per unit if subject to the same duties and taxes as furnace oil. The increased cost of LNG imports also places additional pressure on Bangladesh's foreign-exchange reserves, with the government already owing Tk 440 billion to private power plants and providing substantial subsidies.
