Experts focused on energy sourcing and the importance of building a strategic reserve, describing it as one of the most effective tools to mitigate Bangladesh’s energy challenges.
They also said that a well-designed strategic reserve could act as a national insurance policy for critical energy resources during any energy supply crises.
They were speaking at a seminar titled ‘Mitigating Economic Fallout of Middle East War in Bangladesh’, organised by the Bangladesh Institute of International and Strategic Studies at its office in the capital on Wednesday.
The speakers at the event also said that the recent ceasefire in tensions between the United States and Iran, declared on Wednesday, is certainly a welcome development.
However, it would be premature to assume that this alone has resolved the broader risks; if the ceasefire fails and the war is prolonged further, it would pose a greater risk, they said.
In his keynote presentation, Professor Ijaz Hossain, chairman of the ESTex Foundation, said that Bangladesh remains heavily dependent on fossil fuels, with only about 2.3 per cent of total energy coming from renewable sources.
Moreover, the country’s gas production peaked in 2015–16 and has since declined, forcing increasing reliance on imported LNG to meet growing demand.
He said that Bangladesh sources most of its crude oil from the Middle East, while refined fuels such as diesel are largely imported from Singapore and Malaysia.
‘However, these countries depend on imported crude themselves and cannot guarantee supply during global disruptions, like the ongoing crisis in the Middle East,’ he added.
He also said that Bangladesh spent about $13.2 billion on energy imports in 2024, with an additional $5 billion potentially required due to rising global prices.
‘Combined with other payments such as capacity charges, the total foreign exchange requirement for the energy sector exceeds $20 billion annually, putting significant pressure on the balance of payments,’ he added.
Against this backdrop, he strongly advocated establishing a strategic energy reserve, noting that such reserves are widely used globally, particularly for petroleum products.
‘Countries maintain stockpiles of crude oil, diesel, gasoline, and sometimes LNG or LPG to stabilise markets and manage supply shocks,’ he added, saying that Japan maintains reserves for up to 200 days, while many countries follow a 90-day standard under international guidelines.
Although maintaining such reserves involves high costs, he argued that they should be viewed as an investment rather than a burden.
‘By adopting a counter-cyclical strategy — purchasing fuel when global prices are low and releasing it when prices are high — Bangladesh could both stabilise domestic markets and save foreign exchange,’ he added.
In his speech as the chief guest, Rashed Al Mahmud Titumir, the prime minister’s adviser on the Finance and Planning Ministry, said that Bangladesh has yet to ensure energy security or establish a strategic reserve in the sector.
‘The country lacks a clear benchmark or indicator defining how much fuel should be kept in reserve to safeguard against supply disruptions,’ he added, saying that there is no defined standard specifying the number of days of fuel security the country should maintain.
‘The Eastern Refinery Ltd once provided close to 30 days of fuel security, which has now declined to around 17 days. Despite an annual subsidy of about Tk 60,000 crore in the energy sector, no sustainable buffer stock has been developed,’ he added.
Although energy security has been widely discussed in policy documents and plans, implementation has lagged behind, he added.
‘We inherited a fragile economy alongside a stressed energy sector, compounded by global volatility in energy markets and ongoing geopolitical tensions,’ he added.
The past fascist regime emphasised expanding power generation, but overlooked foundational aspects of energy security.
‘To address the situation, the government is pursuing short-, medium- and long-term plans aimed at ensuring stability and sustainability in the energy sector,’ he added.
Immediate efforts focus on maintaining an uninterrupted supply, while medium-term measures aim to stabilize the system, and long-term strategies seek to build a resilient energy framework.
He outlined five key priorities guiding the approach— diversifying energy sources to reduce dependence, building a strategic buffer stock, ensuring sustainable financing for imports and supply, expanding the use of renewable and alternative energy, and adjusting prices in line with global markets while considering domestic inflation and purchasing capacity.
He also said that strengthening the energy mix and gradually increasing the share of renewable energy is essential for both environmental sustainability and long-term economic stability, and they are working on it.
Inamul Haq Khan, senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association, emphasised the urgent need for trade and market diversification, warning that Bangladesh’s export-led economy remains highly vulnerable to global energy shocks and geopolitical uncertainties.
He also said that although the recent ceasefire between the United States and Iran had eased tensions and brought some stability to global energy markets, the economic shocks triggered by the conflict were still unfolding.
He said that the Middle East crisis had evolved beyond a geopolitical issue into a full-scale energy shock with far-reaching global economic consequences.
‘While key routes such as the Strait of Hormuz remained operational following the ceasefire, recent volatility exposed the fragility of global supply chains, with disruptions likely to persist for months,’ he added.
Mahfuz Kabir, research director of BIISS, also presented a keynote where Major General ASM Ridwanur Rahman, director general of BIISS, delivered the welcome address and chaired the session.
