Bangladesh Needs Energy-Market Expertise
Bangladesh urgently needs the right expertise in energy procurement. Historically, this is an area where the country has suffered significant losses. We still lack the institutional capacity to consistently buy fuel at the right time, at the right price and with the right risk-management strategy.
Based on available calculations, Bangladesh could be spending roughly $250 million more each year on its 110–115 LNG cargoes because of the gap between procurement prices and international benchmarks. The precise figure, however, depends on the benchmark, delivery window and methodology used for comparison.
The situation has become more difficult in 2026. The war in the Middle East, disruptions around the Strait of Hormuz and volatility in the global LNG market have forced Bangladesh to procure a growing number of spot cargoes at elevated prices.
On 24 August 2026, for example, the government approved two September LNG cargoes at more than $24 per MMBtu—one from POSCO International at $24.625 and another from TotalEnergies Gas & Power at $24.25 per MMBtu.
Bangladesh’s 2026 annual delivery plan initially envisaged 115 LNG cargoes, combining long-term contracts, short-term arrangements and spot purchases.
QatarEnergy, one of Bangladesh’s largest long-term suppliers, also cut its planned deliveries amid disruptions caused by the regional conflict. That forced Bangladesh to turn increasingly to alternative sources and the spot market.
This experience exposes a deeper structural problem.
1. Fuel planning must be based on equations, not administrative judgment
Under the current system, major fuel-planning decisions ultimately move through the energy ministry. Petrobangla or BPC prepares procurement proposals based on market requirements, after which the files move through the ministry and receive approval before going to the Cabinet Committee on Government Purchase.
The process can be represented as:
BPC/Petrobangla → Ministry → Cabinet Committee → Ministry → BPC/Petrobangla.
The file goes up, gets approved and comes back down. Only then does the actual procurement begin.
Such administrative oversight is necessary. But energy markets move far faster than bureaucratic files.
If every cargo is treated as a separate retail-style procurement, Bangladesh loses the opportunity to lock in prices when the market is favourable.
The 24 August purchases illustrate the problem. The two cargoes were approved at $24.625 and $24.25 per MMBtu. Only days earlier, another cargo had been approved at $23.93, while two earlier August cargoes were approved at $21.778 and $21.878.
The question is therefore not simply whether a particular cargo is expensive.
The real question is whether Bangladesh is anticipating the market—or approaching the market only after a crisis has already emerged.
Fuel planning should not depend on the personal market experience of a minister or secretary.
Fuel planning should be built on engineering, economics, demand forecasting, market intelligence and risk modelling.
That requires accurate load forecasting.
Data should come not only from substations, utilities and distribution authorities, but also from business associations, industrial clusters, EPZs, BEZA, BEPZA, high-tech parks and other emerging centres of industrial demand.
One example illustrates the problem. This year, the load forecast was reportedly 12.4%, while actual demand growth exceeded 17%. At the same time, a substantial portion of the forecast demand could not be supplied. That means the system was facing both unexpectedly strong demand and major supply constraints.
Therefore, calculating how much gas power plants need is not enough.
We need to know where, when and how much electricity will be required—and then build an integrated fuel mix around that demand.
2. Spot procurement cannot replace long-term planning
A reliable fuel-mix plan should be built around an accurate demand forecast and supported by long- and medium-term procurement.
Bangladesh already has a foundation of long-term LNG contracts with suppliers including QatarEnergy, OQ Trading and Excelerate Energy. Several of these agreements were designed to increase deliveries from 2026 onward.
But long-term contracts also carry supply risk. The Qatar disruption in 2026 demonstrated that clearly.
Therefore, Bangladesh needs not only long-term contracts but also diversified suppliers and alternative supply routes.
There is no shame in admitting that Bangladesh lacks sufficient international energy-market, trading and risk-management expertise.
The solution is to build that expertise institutionally.
3. Build direct and diversified supplier relationships
In the short and medium term, Bangladesh should reduce excessive dependence on third-party trading intermediaries and build direct commercial relationships with major producers and established international energy marketers.
Companies such as Shell, TotalEnergies and QatarEnergy can be part of such a strategy, alongside established global trading houses. But producers and trading companies should not be treated as interchangeable; their contractual structures, pricing mechanisms, supply guarantees and risk profiles are different and must be assessed accordingly.
Bangladesh needs multiple reliable supply sources that can provide continuity and, when necessary, increase deliveries within reasonable limits.
If there is no established purchasing relationship with a supplier, there is no guarantee that the supplier will prioritise Bangladesh when a crisis hits.
4. Buy before the crisis, not after it
Without an accurate fuel plan, Bangladesh repeatedly finds itself buying in the spot market during crisis periods.
At that point, the buyer has little negotiating power because the market knows the buyer has limited time.
The result is predictable: higher prices.
The state needs a balanced procurement portfolio.
That portfolio should combine one-, two-, three- and five-year contracts with fixed or formula-based pricing. At the same time, supply guarantees for the long peak-demand period from April through August should be secured in advance through both domestic and international sources.
Spot purchases should remain part of the portfolio—but they should be planned and limited.
There is nothing wrong with using the spot market for major disruptions, disasters, supply interruptions or sudden demand spikes. But relying continuously on spot purchases throughout a long summer demand window is not a sustainable energy strategy.
Bangladesh’s 2026 experience demonstrates why. After QatarEnergy reduced deliveries, the country had to increase its reliance on spot purchases and alternative suppliers.
5. Energy procurement needs financial risk management
When prices are volatile, market exposure must be brought under professional financial risk management.
Petrobangla and BPC need stronger teams capable of analysing LNG pricing, Henry Hub futures, Brent-linked derivatives, LNG swaps and other OTC instruments.
There is a structural problem here.
Ministers and secretaries are rotating positions. Institutional market expertise cannot depend on the personal experience of whoever happens to occupy a particular office.
The expertise must belong to the institution.
Bangladesh therefore needs a permanent professional team covering energy trading, market analytics, commodity risk management and international negotiations.
The biggest weakness in Bangladesh’s energy procurement system may not be money.
It may be expertise.
6. Move from ad-hoc procurement to portfolio management
Bangladesh’s procurement system still tends to be reactive: identify a shortage, go to the market and buy.
Modern energy markets demand a different sequence.
First, forecast demand.
Then determine the fuel mix.
Then secure supply.
Then structure long- and medium-term contracts.
Then manage price and supply risks.
Finally, use the spot market to cover the remaining gap.
That should be the sequence.
The spot market itself is not the problem. The problem is using it without a strategy.
When prices are favourable, Bangladesh should be able to block future spot volumes or secure prices for future delivery, subject to market liquidity, contract structures and proper risk controls.
That is why demand forecasting, fuel planning and procurement must be integrated into one professional management framework.
The bottom line
Bangladesh’s energy security is no longer simply a question of how much gas is available, how many power plants exist or how many LNG cargoes can be imported.
The real question is:
How intelligently are we buying it?
The volatility of 2026 has demonstrated the risks of excessive dependence on a single supplier, a single supply route or emergency spot purchases.
Bangladesh needs a professional Energy Procurement & Trading Architecture.
That means building a permanent team of international energy-market specialists, trade negotiators, demand forecasters, commodity-risk managers and financial-market experts.
We need to reduce ad-hoc procurement, minimise unnecessary intermediary dependence, diversify supplier relationships and combine long-term and medium-term contracts with disciplined spot purchases.
Above all, energy procurement must move away from political and administrative guesswork and towards engineering, economics, data and market-risk modelling.
Bangladesh’s 115 planned LNG cargoes are not 115 isolated purchases.
They are one national energy portfolio.
If that portfolio is professionally managed, the country can potentially reduce hundreds of millions of dollars in avoidable costs.
If it is not, we will keep returning to the same place:
waiting for a crisis, entering the market late and buying energy at a premium.
Author || Former Adviser to the Interim Government; Engineer and Writer.
Editorial Note || The views expressed are solely those of the author and do not necessarily reflect the editorial position of Digital Bangla Media. To uphold diversity of opinion, Tech-Thought is published without editorial censorship.
