Four sectors may require Tk 420bn subsidies over West Asia tensions, says finance minister

The sectors requiring subsidies are: electricity, gas, petroleum products, and fertiliser

Rising tensions involving Iran and the wider region of West Asia could force the government to provide an additional Tk 426 billion in subsidies for fuel, gas, electricity and fertiliser by the end of the ongoing fiscal year, Finance Minister Amir Khosru Mahmud Chowdhury has told parliament.

Responding to a question from MP SM Jahangir Hossain on Tuesday, the minister said the impact of the regional instability is already being felt in energy, fertiliser, import costs, transport expenses, inflation, foreign exchange management, remittance inflows and overseas employment.

According to a preliminary assessment presented to parliament, the government may need an extra Tk 198.21 billion in electricity subsidies, Tk 111.70 billion for gas, Tk 102.58 billion for petroleum products and about Tk 13.50 billion for fertiliser.

“Higher prices of fuel oil, LNG and fertiliser in the international market have increased import and production costs,” Khosru said.

He warned that rising energy prices could push up costs in the power, transport, agriculture and industrial sectors, adding further pressure on consumer prices and inflation.

The finance minister also said prolonged instability in West Asia could threaten overseas employment opportunities and remittance earnings, as the region remains a key destination for Bangladeshi migrant workers.

He said the government is closely monitoring developments and has taken steps, including diversifying energy import sources, expanding domestic gas exploration, maintaining supplies of essential goods, strengthening foreign exchange management and exploring alternative labour markets.

However, the minister did not provide estimates of actual financial losses by sector, saying a more reliable assessment would require additional data.