Removing double taxation on imported Liquefied Natural Gas (LNG) could significantly ease Bangladesh’s ongoing gas crisis, Petrobangla Chairman Md Rezanur Rahman told Just Energy News in an exclusive interview on Monday.
He explained that the current tax regime imposes 50% duty at the import stage and another 50% at the distribution stage, inflating natural gas costs by Tk 6,000 to Tk 7,000 crore annually.
“This dual taxation not only burdens the government with higher subsidies but also raises import costs, especially from the spot market,” Rahman said.
Bangladesh currently provides Tk 6,500 crore in gas subsidies, allowing the import of 82 LNG cargoes. Eliminating import duties could increase that to 98 cargoes—16 more—within the same budget.
Talks with NBR Underway
Rahman confirmed that discussions with the National Board of Revenue (NBR) are progressing, following a meeting attended by Power and Energy Adviser Muhammad Fouzul Kabir Khan. “The NBR seems convinced, as the current system brings no extra value to them,” he noted.
The country supplies around 2,700 million cubic feet per day (mmcfd) of gas against a demand of 3,700 mmcfd. Petrobangla believes that duty removal could help close this 1,000 mmcfd shortfall. Gas distribution companies have also requested an immediate 100 mmcfd boost.
Boosting Local Production and Efficiency
To enhance domestic output, Petrobangla plans to drill 50 wells this year and 100 more in 2026. Sylhet and Bangladesh Gas Fields will each drill four exploratory wells, while two deep evaluation wells are already in progress.
System losses have declined due to crackdowns on illegal connections. “Titas Gas’s loss has dropped to 7.8% and Bakhrabad’s to 9.7%,” Rahman said. A seven-member task force of executive magistrates is leading the effort, with a goal to halve system losses by January 2026.
Petrobangla also plans to launch a real-time gas monitoring system modeled on the power sector’s National Load Dispatch Centre. “It will track usage across 7,500 industrial and CNG connections and curb pilferage,” he said.
Exploration and Expansion
A draft proposal has been submitted for exploring untapped gas blocks, focusing initially on Blocks 22A and 22B in the Chattogram Hill Tracts. Government-to-government deals are being considered, with tenders as a fallback. Tariffs will vary by region due to logistics and security.
The government may offer new industrial gas connections depending on supply. “We’ve submitted 150 proposals and are reviewing reallocation options,” Rahman said.
Financial Reforms Underway
Petrobangla cleared all domestic and foreign dues by April 30, reducing its LNG import premium from $1.50 to just $0.30–0.40 per MMBtu. “This improves Bangladesh’s energy credit rating,” Rahman said.
The Power Development Board (BPDB) has begun repaying its Tk 18,000 crore arrears over 14 months, paying Tk 4,500 crore in the last two months alone. “If this continues, our financial position will stabilize,” he added.