Tk 42,600cr subsidy burden on 4 sectors
The government may need to provide an additional Tk 42,600 crore in subsidies across four key sectors in the outgoing 2025-26 fiscal year due to ongoing conflicts in the Middle East and volatility in global energy markets, Finance Minister Amir Khosru Mahmud Chowdhury told parliament on Tuesday.
The minister disclosed the figures while responding to a starred question from SM Jahangir Hossain, a ruling party member from Dhaka-18, who asked whether recent Middle East hostilities had caused Bangladesh any measurable economic or commercial damage.
“The recent conflicts in the Middle East, including those involving Iran, and instability in global fuel markets have placed additional pressure on the government’s subsidy expenditure in the oil, gas, electricity and fertiliser sectors,” the minister said.
“According to preliminary estimates, additional subsidies of approximately Tk 42,600 crore may be required in just these four sectors through June of the 2025-26 fiscal year.”
The electricity sector alone accounts for nearly half the total additional burden, reflecting sustained pressure from rising LNG import costs and higher generation expenses.
Chowdhury warned that the regional turbulence had created both immediate and prospective risks for the broader economy.
The impact, he said, is already visible across energy, fertiliser, import costs, transportation, inflation, foreign exchange management, remittances and overseas employment.
“Rising prices of fuel oil, LNG and fertiliser in international markets have increased import costs and production expenses.
Higher energy prices could indirectly push up costs in the power, transport, agriculture and industrial sectors, creating pressure on market prices and inflation,” he said.
The minister also flagged risks to Bangladesh’s remittance inflows, noting that the Middle East is one of the principal destinations for Bangladeshi migrant workers.
A prolonged period of instability in the region, he cautioned, could threaten both overseas employment opportunities and the steady flow of remittances that the country’s economy depends on.
The government, however, maintained that it has not been caught off guard.
Chowdhury outlined a set of measures already under way, including diversifying sources of fuel imports, intensifying domestic gas exploration, ensuring stable supplies of essential commodities, tightening foreign exchange management and actively scouting new labour markets abroad.
“The government has already taken several steps,” he said. “The situation is being closely monitored, and all necessary preparations have been made to address potential economic risks.”
The disclosure underlines the growing fiscal strain Bangladesh faces as it navigates an external environment shaped by geopolitical conflict, with the energy subsidy bill threatening to widen the budget deficit in the final months of the fiscal year.
