Bangladesh Faces Extra BDT 42,600 Crore Subsidy Burden in 4 Sectors: Amir Khosru

Finance Minister Amir Khosru Mahmud Chowdhury on Tuesday informed the Parliament that Bangladesh requires an additional subsidy of approximately BDT 42,600 crore across four key sectors—oil, gas, electricity, and fertilizer—in the outgoing fiscal year of 2025-2026, driven by the ongoing conflict in the Middle East.

Replying to a starred question from ruling party lawmaker SM Jahangir Hossain (Dhaka-18), who sought to know whether Bangladesh had incurred any economic or business losses due to the recent war in the Middle East, the Finance Minister explained the detailed fiscal strain. 

“Recent conflicts in the Middle East, including Iran, and the instability in the global energy market have put additional pressure on the government's subsidy spending in the oil, gas, electricity, and fertilizer sectors. The additional subsidy requirement in these four sectors alone is about BDT 42,600 crore by June in the 2025-26 Fiscal Year,” he said, citing a preliminary estimate.

Providing a sector-wise breakdown of the unexpected financial burden, the Finance Minister noted that out of the additional subsidy amount, some BDT 10,258 crore may be required for oil, BDT 11,170 crore for gas, BDT 19,821 crore for electricity, and BDT 1,350 crore for fertilizer.

Amir Khosru emphasized that the recent unrest in the Middle East, including Iran, has posed both immediate and potential risks to the Bangladesh economy. 

“So far, the impact has been mainly visible in the areas of fuel, fertilizer, import costs, transport costs, inflation, foreign exchange management, remittances and foreign employment,” he stated before the House.

He further elaborated that the increased prices of fuel oil, liquefied natural gas (LNG), and fertilizers in the international market have severely pressured import and domestic production costs. 

This energy price hike threatens to drive up operational costs across the electricity, transport, agriculture, and industrial sectors, which can indirectly destabilize market prices and exacerbate inflation.

Furthermore, since the Middle East remains a vital destination for Bangladeshi expatriate workers, Khosru warned that prolonged instability in the region could pose significant risks to future foreign employment opportunities and steady remittance inflows.

Assuring the Parliament that the government is closely monitoring the unfolding situation, the Finance Minister highlighted that a number of strategic steps are already being taken to address the current crisis. 

These measures include diversifying the country's sources for energy imports, actively exploring local gas reserves, maintaining a normal supply of essential commodities, exercising heightened caution over foreign exchange management, and proactively exploring alternative labor markets for Bangladeshi workers.