Controlling power and energy tariffs in 2025 is a critical question for Bangladesh as internal and external pressures mount over tariff adjustments.
The Bangladesh Power Development Board (BPDB) and Petrobangla face staggering annual losses, with total subsidies projected at Tk 61,000 crore for the current fiscal year.
Mounting Pressures
External pressure has intensified, particularly from the International Monetary Fund (IMF), which has linked tariff adjustments to the disbursement of the next instalments of its $4.7 billion loan programme.
However, Bangladesh’s Power and Energy Division officials have sought a three-year timeline to balance the gap between demand and supply costs, citing fears of inflation and competitiveness losses.
Energy and Mineral Resources Division Secretary Saiful Islam said, “We have firmly rejected any natural gas tariff hikes at this moment, as they would further drive inflation.”
He outlined plans to cut subsidies through measures such as reducing system losses, tackling illegal connections, and implementing austerity in office expenditures.
Rising Costs and Subsidies
The BPDB reports monthly electricity sales of Tk 5,370 crore but faces a Tk 3,521 crore deficit due to production costs.
Oil-fired plants, planned to shut during the dry season, contribute to the high cost. New coal-fired plants could reduce costs, but disputes over levies, such as dredging fees at Payra Port, threaten to increase expenses.
BPDB officials warn that these levies undermine cost-cutting efforts, with electricity generation costs rising from Tk 6.50 to Tk 7.01 per kilowatt-hour due to added coal import charges.
Economic Consequences
Controlling tariffs is essential for food inflation, export competitiveness, and industrial stability. The readymade garment (RMG) sector, Bangladesh’s primary export industry, is particularly affected by inconsistent energy supply.
Former BGMEA Director Mohiuddin Rubel stated, “Rising production costs and unreliable energy supply are making it harder for us to compete globally. Without energy security, our long-term competitiveness is at risk.”
Rubel highlighted issues such as low gas pressure and frequent interruptions, which lead to production delays, higher costs, and buyer dissatisfaction.
Expert Insights
Energy analyst Shafiqul Alam criticised Bangladesh’s reliance on imported fossil fuels and pointed to several challenges for 2025.
The challenges include limited success in renewable energy adoption, insufficient local gas supply, rising capacity charges from new power plants amid slow demand growth, and lack of demand-side energy efficiency measures.
Alam called for a comprehensive plan to stabilise the energy sector within the next five to ten years, warning that frequent tariff adjustments alone would not resolve systemic issues.
“The government must ensure adequate dollar allocations for energy imports to prevent further industrial disruptions,” he said.
Path to Sustainability
The government must address inefficiencies and implement long-term reforms, focusing on renewable energy, demand management, and structural adjustments. Without these measures, power and energy sector challenges will continue to threaten Bangladesh’s economic stability and growth.
