Energy supply has become one of the much-talked-about issues in the local and global economic arena in recent times due to the US-Israel and Iran war-led Middle Eastern crisis.
The supply chain disruption of imported fuel has brought unprecedented socioeconomic challenges.
Though the Government made various timely interventions to deal with the energy shock fallouts, we are still undergoing this transition.
Due to a large dependence on imports of non-renewable energy, energy security is receiving signifi cant attention, as it is closely tied to national economic development, long-term industrial security, and inflation.
In the modern economy, a stable energy supply is a critical component of productivity for any business or organization.
Bangladesh conventionally relies more on imported energy sources than locally available energy to support its economic activities.
Since the national budget serves as a blueprint for a country’s economic mapping, the robust budget of FY2027 is with TK.
9.38 trillion, the largest ever in the history of Bangladesh, was expected to prioritize smooth energy security linking with economic development.
Indeed, both energy security and the private sector are lifelines of our emerging economy.
However, despite the importance of energy adequacy in enabling a conducive business environment, a clear focus on energy security is the least attended to in this budget.
The energy shortfall has severely affected industrial operations, forcing hikes in electricity prices and requiring increased imports of fertilizer and other raw materials.
Additionally, the supply crunch drove up transportation costs, local supply chain management costs, and industrial expenditure.
Consequently, inflation has trended upward in recent months while other economic activities have slowed down.
Due to this concern, private investment has been crippled, dropping to 4.32%, the lowest level recorded in Bangladesh over the last three decades, leaving local investors hesitant to commit capital to emerging or potential avenues in the economy.
The overall energy budget of Tk.
17,345 crore with a nominal hike of 2.32% may not bring optimum results amidst the current economic times towards the achievement of the hugely needed economic transformation agenda.
The moves of the government, including drilling 69 wells and carrying over operations for the fi scal year, alongside establishing a strategic fuel reserve to manage emergency volatility, are apparently termed positive.
However, the lack of a comprehensive, concerted plan to overcome this volatile energy state remains unaddressed.
Furthermore, while the government is encouraging solar power and trying to promote solar-led transport systems and solar infrastructure, it has long been understood that alternative energy cannot fully secure the country’s widespread needs, as the economy is yet to be ready for complete renewable transformation.
Bangladesh lacks the natural resources for alternative or green energy to replace conventional energy-led economic operations overnight.
Compounding this, the proposed budget for the sector needs to be increased to meet growing and diversifi ed national demands.
We may also follow the austerity philosophy in other sectors to support the growing budget needs of this sector, as it is the root of other sectors.
The frequent tariff hike of electricity is not improving the state of security, but adds a cost burden for the masses.
The Energy Development fund is traditionally charged on the gas bill to meet the development cost of the energy sector, but the EDF fund created has rarely been utilised.
The previously designed Power sector master plan and later designed Integrated Energy and Power Master Plan (IEPMP) have no impact on containing the global shocks, nor any reflection in the national budget.
The budget should have a clear mapping of how the uninterrupted supply can be ensured for all energy-related economic activities.
The plan of establishing ‘Strategic Fuel Reserve’ and related storage infrastructure may add value to overcome emergency volatility to some extent.
In the ever-changing geopolitical context, our policymakers are to prioritize strategic approaches to mitigate unpleasant challenges in our best interest.
It is worth mentioning that the long-held investment gamechanger moves economic zones are not being functional as energy supply commitments are unmet.
As a result, a huge amount of local and foreign investment remains unutilized in EZs.
The industrial gas connection has been shut for almost a decade, and this prolonged decision is causing disinvestment.
The plug-and-play, rapid NSW service and other ease of doing business initiatives under the deregulation initiatives of the government in this proposed budget, without a smooth industrial gas supply, will have minimal positive impacts on reviving confi dence for local and foreign industrial investment.
The shift to renewable energy development through a rebate does not have any immediate impact, considering our current macroeconomic reality.
Considering these factors, securing a primary energy mix through domestic exploration and diversifi ed sourcing is critical to sustain industrial investment.
As the economy approaches LDC graduation, it will face signifi cant structural, regulatory, and infrastructural challenges for smooth economic transformation.
The planned economic transitional strategy of later graduation is linked to energy security as a foundational resource for export and local marketoriented industrial development.
Besides, the ‘Trillion Dollar economy’ vision by 2034 is to be embedded in core sectors of the economy, and the budget needs to align with the core targets of this vision.
In this regard, the readiness and competitiveness of the private sector through an enabling atmosphere requires intensive energy security as the key prerequisite.
To address these upcoming priority needs, the proposed ‘Power Sector Strategy Paper (2026-2050)’, a least-cost power generation plan, integrating SCADA, GIS, and Asset Management (AM), is in place.
Despite all, the question always remains whether the piecemeal planning will ease and steer our core economic visions.
For translation of these plans, predictable tax, deregulation policies, and implementation strategies backed by a fi rm commitment of governance are necessary to ensure a predictable and consistent energy supply and pricing plans, and energy-intensive businesses over the years to come.
Smooth productivity always correlates with a higher tax-to-GDP target.
We believe this large welfare-oriented budget may be implemented with the higher tax revenue stream from the dynamic and resilient private sector if they are supported by a relentless energy supply as a pressing resource.
Given the ongoing global political crises and unpredictable supply chain disruptions, we must establish clear policies and alternative supply strategies to build a balanced, supportive, and businessfriendly energy ecosystem to achieve our economic visions.