SANEM flags sharp budget imbalance between power, energy divisions

Bangladesh’s latest national budget heavily favours power generation over energy, with the Power Division receiving more than six times the allocation of the Energy and Mineral Resources Division (EMRD).

The government has allocated Tk 14,996 crore to the Power Division, compared with Tk 2,349 crore for the EMRD.

Together, the two divisions received Tk 17,345 crore, accounting for about 1.85 percent of the national budget for fiscal year 2026–27, down from 2.15 percent in the revised budget of the previous fiscal year.

Although the EMRD’s allocation increased by 71.96 percent from the previous year’s revised budget, the disparity between the two divisions remains substantial, the South Asian Network on Economic Modeling (SANEM) said in a press release today.

This comes despite the government identifying energy security as one of its ten strategic priorities for the year.

SANEM warned that the imbalance leaves Bangladesh vulnerable to global fuel supply shocks and increases its dependence on liquefied natural gas (LNG), risks that have intensified amid ongoing geopolitical tensions, including the Israel-US-Iran conflict.

To support the sector, the government has allocated Tk 36,000 crore in subsidies to the Bangladesh Power Development Board and Tk 31,016 crore for gas and related costs in FY2026–27.

SANEM said that without increased investment in onshore and offshore gas exploration, the country risks remaining dependent on costly fuel imports.

The organisation called for a rapid but carefully managed reversal of the EMRD’s chronic underfunding, urging the government to implement gas exploration plans and utilise domestic natural gas as a transitional fuel on the path towards a complete phase-out of fossil fuels.