BD plans to import $1.2b fuel from US annually

The Energy Division has initiated a plan to procure LNG, LPG, and refined fuels worth about US$1.2 billion annually from the United States starting next year to help narrow the trade gap with Washington.

"As part of the plan, Bangladesh will import 16 LNG cargoes from the US, including 10 from US company Excelerate Energy. The annual cost of long-term LNG imports from the US would exceed $700 million, while additional LNG will also be sourced from the spot market," said Mohammad Saiful Islam, Secretary of the Energy and Mineral Resources Division (EMRD).

Bangladesh recently secured a 20 per cent reciprocal tariff concession on its exports to the US after a series of negotiations.

Officials said the country will significantly increase imports of liquefied natural gas (LNG), liquefied petroleum gas (LPG), and refined fuels from the US from next year as part of the government's efforts to reduce the trade gap.

However, US-based Chevron earns around $420 million annually from its operations in Bangladesh. During tariff negotiations, Washington classifies these revenues under "trade in services," which are not counted as part of bilateral goods trade, the secretary added.

According to the Energy Division, Bangladesh would expand LPG imports from the US through private companies and is considering importing crude oil for local refining.

Presently, Omera LPG has imported more than 200,000 metric tonnes of LPG from the US since February through third-party arrangements.

"We are negotiating directly with major US suppliers to secure competitive prices while ensuring supply security. Bangladesh could potentially meet most of its LPG demand from the US if logistical challenges are addressed," said Azam J Chowdhury, Director of Omera LPG.

TK Group and Abul Khair Group are preparing to import crude oil and refine it in Bangladesh.

"We are drafting a policy for private refineries under a formula-based product return system. Any violation of the formula will result in immediate closure of the refinery," Secretary Islam said.

Energy expert Prof Ijaz Hossain, former chemical engineering professor at BUET, welcomed the move but cautioned about pricing. "Energy imports should be secured at competitive tariffs. If prices are higher compared to other sources, it may lead to public dissatisfaction," he told media.

He also noted that Bangladesh may seek trade benefits in return, particularly by increasing exports of Bangladeshi garments.

In 2024, bilateral trade in goods and services between Bangladesh and the US stood at $12.4 billion. Of this, Bangladesh exported goods worth $8.4 billion while importing $2.3 billion, alongside importing $1.8 billion in services and exporting $423 million in services.