Power Tariff Rise Awaits Cabinet Approval

Amid continued volatility in global energy markets and a sustained rise in import costs, Bangladesh’s power and energy sector is facing mounting financial pressure. In response, the government has initiated a process to adjust both wholesale and retail electricity tariffs. A high-level cabinet committee has been formed to examine the proposed adjustments and provide recommendations before any final decision is taken.

According to sources within the Power Division, a proposal has been prepared to increase electricity prices for residential consumers by between Tk 0.70 and Tk 1.80 per unit. Once approved by the cabinet, the proposal will be forwarded to the Bangladesh Energy Regulatory Commission (BERC) for formal consideration and implementation.

An official summary prepared for submission to the cabinet indicates that the sector could face a deficit of approximately Tk 565 billion in the current fiscal year. To mitigate this shortfall, the Bangladesh Power Development Board (BPDB) has outlined three alternative proposals. These include raising wholesale tariffs to reduce subsidy requirements by an estimated Tk 50 billion to Tk 125 billion. In addition, a retail tariff increase has been proposed for all residential users except those classified under the lifeline category.

Commenting on the situation, Monir Hossain Chowdhury, spokesperson and Joint Secretary of the Energy and Mineral Resources Division, stated that due to ongoing global conflicts, the government is currently providing around Tk 25 billion per month in subsidies to the energy sector. He noted that the government has continued this support to ensure uninterrupted energy supply and minimise public hardship.

BPDB sources report that outstanding dues to both domestic and foreign power plants have exceeded Tk 470 billion. Of this amount, more than Tk 165 billion is owed to private oil-based power plants. Many of these operators have reportedly been under severe financial strain due to non-payment of bills over the past seven to eight months. In addition, arrears for imported electricity have reached nearly Tk 30 billion.

Financial data from BPDB for the 2024–25 fiscal year show a significant imbalance between income and expenditure, as summarised below:

Overall, BPDB estimates that without an increase in electricity tariffs, it may require subsidies of up to Tk 650 billion in the current fiscal year. However, only Tk 360 billion has been allocated in the national budget, of which Tk 195 billion has been disbursed to the Power Division so far.