Bangladesh's industrial growth hurt by high LNG prices, minister says

High LNG prices are causing a slowdown in Bangladesh's industrial growth, according to the country's power minister Iqbal Hasan Mahmud. The higher prices are leading to electricity outages and increased government spending on gas subsidies, which in turn impacts development programs. As LNG imports from Qatar, which previously supplied 95% of Bangladesh's needs, have been cut off due to the Strait of Hormuz, the country has had to purchase expensive LNG on the spot market.

This has increased government expenditures on power and gas subsidies to nearly 4% of the GDP annually, even before the war with Iran. Mahmud highlighted that Bangladesh is exploring alternative sources of LNG, such as Indonesia, Australia, and China, while also aiming to boost its use of renewables. The South Asian nation plans to install 10,000 megawatts of solar power over the next five years and offer tax incentives for solar and lithium battery investments.

Discussions are ongoing with China regarding the installation of small modular nuclear reactors, and the use of coal, which has remained relatively cheap since the start of the Iran war, is also being considered.