Renewables are a natural hedge against fossil fuel shocks in General Energy News 08/04/2026 Bangladesh, like other countries, is currently grappling with the geopolitics-led energy supply disruption, which the International Energy Agency has described as the biggest threat to energy security in the world’s history. On closer inspection, four years ago, the country experienced a comparable crisis, stemming from the Russia-Ukraine war. Yet, the country finds itself the least prepared to navigate the tumultuous situation that has drastically increased the prices of fossil fuels, with supply remaining curtailed. The abrupt fossil fuel supply disruption, owing to the closure of the Strait of Hormuz and suspension of liquefied natural gas (LNG) supply from Qatar, has sent a shockwave through the international fossil fuel market, leading to a massive surge in oil and LNG prices. High import prices have already raised the energy sector’s subsidy burden, tempting the Bangladesh government to draw a loan of USD2 billion (BDT24,486 crore) from international agencies. With renewable energy capable of partially insulating Bangladesh from the price volatility of fossil fuels in the international market, the country should swiftly expand its renewable energy capacity. The fiscal burden is soaring Bangladesh has radically transformed its power sector in the last decade and a half, without focusing on the urgency of accelerating renewable energy and enhancing energy security. As the country relies more heavily on imported fossil fuels than domestic energy resources, it is now experiencing perpetual vulnerability with a surging fiscal burden. For instance, the Bangladesh Petroleum Corporation (BPC) reportedly approved 0.8 million tonnes of diesel purchase from the spot market at an average cost of BDT169.75/litre (USD1.38/litre) (calculated based on the prices of different suppliers). Since Bangladesh has kept the diesel price fixed at BDT100/litre (USD0.81/litre), the spot purchases will result in a revenue shortfall of BDT69.75/litre (USD0.57/litre). The monthly subsidy on account of diesel consumption of approximately 375,000 tonnes will soar to BDT31 billion (USD0.252 billion), excluding import duty and commissions of BPC and traders. Likewise, Bangladesh’s spot purchases of nine LNG cargoes at an average price of about USD21.79/million British Thermal Units (MMBtu) (BDT 2,668/MMBtu) in March 2026 requires an average subsidy of BDT67.5/m3 (USD0.55/m3), excluding import duty, terminal and regasification fees (note: prices of LNG cargoes ranged from USD19.77/MMBtu to USD28.28/MMBtu [BDT2,420/MMBtu to BDT3,463/MMBtu]; IEEFA’s calculation shows that the weighted average tariff of gas in Bangladesh is approximately BDT23.82/m3 [USD0.19/m3]). Assuming an average monthly LNG consumption of 25 billion cubic feet, the subsidy burden will rise to BDT47.74 billion (USD0.39 billion). While Bangladesh has sought USD2 billion (BDT24,486 crore) from multilateral agencies to ease fossil fuel imports, the amount will only meet the subsidy for LNG and diesel consumption for just over three months (based on current prices, three months’ subsidy for diesel and LNG are USD0.756 billion [BDT92.56 billion] and USD1.17 billion [BDT143.24 billion], respectively). The subsidy will also rise in the power sector due to the costly furnace oil and coal. The prolonged Middle East crisis will, therefore, significantly strain the country’s energy and power sectors, compelling the go