Cabinet Decision Pending on Power Price Rise

Rising import costs and ongoing instability in global energy markets have intensified financial pressures on Bangladesh’s power and energy sector. In response, the government has moved to adjust electricity tariffs at both wholesale and retail levels. A high-level cabinet committee has been constituted to review the proposed adjustments and submit recommendations prior to any final approval.

Officials from the Power Division indicate that a proposal has been prepared to increase electricity tariffs for residential consumers by between Tk 0.70 and Tk 1.80 per unit. Upon receiving cabinet approval, the proposal will be sent to the Bangladesh Energy Regulatory Commission (BERC), which is responsible for setting and revising energy tariffs.

A summary prepared for the cabinet highlights that the sector may face a deficit of approximately Tk 565 billion in the current fiscal year. To address this, the Bangladesh Power Development Board (BPDB) has put forward three alternative proposals. These include increasing wholesale electricity prices in order to reduce subsidy requirements by an estimated Tk 50 billion to Tk 125 billion. Additionally, a retail tariff increase has been proposed for all residential users except those under the lifeline category.

Monir Hossain Chowdhury, spokesperson and Joint Secretary of the Energy and Mineral Resources Division, stated that the government is currently providing around Tk 25 billion per month in subsidies to the energy sector due to the impact of global conflicts on fuel prices. He noted that these subsidies are being maintained to ensure continuity of supply and to limit the burden on consumers.

According to BPDB data, outstanding payments to domestic and foreign power producers have exceeded Tk 470 billion. Of this, more than Tk 165 billion is owed to private oil-based power plants. Many operators in this segment have been facing acute financial challenges, as payments have reportedly remained unsettled for the past seven to eight months. In addition, arrears for imported electricity have reached nearly Tk 30 billion.

Financial figures for the 2024–25 fiscal year illustrate the scale of the imbalance between revenue and expenditure:

Overall, BPDB estimates that without an increase in tariffs, subsidy requirements could rise to approximately Tk 650 billion in the current fiscal year. However, the national budget has allocated Tk 360 billion for this purpose, of which Tk 195 billion has so far been released to the Power Division.