Energy Subsidies in Bangladesh: A profile of groups vulnerable to reform

The report finds that energy subsidies in Bangladesh increased sharply between FY2010 and FY2012, driven by rising import costs and increased reliance on liquid fuel for electricity generation. It identifies that poor agricultural households are particularly vulnerable to kerosene and electricity price changes, while the transport and power sectors are the most energy-intensive production areas. The authors argue that current universal subsidies are inefficient and recommend targeted support, improved tariff structures, and a transparent phase-out strategy to free up resources for essential services and renewable energy.

• Total on-budget subsidies in Bangladesh are projected to increase by 177 per cent over three years, rising from BDT 107.7 billion in FY2010 to an estimated BDT 298.1 billion in FY2013.
• The energy sector's share of total budgetary subsidies grew from 23 per cent in FY2010 to 52 per cent by FY2013, reflecting a rapid escalation in costs.
• Overall energy subsidies, including both on-budget and off-budget costs, rose from BDT 9.8 billion in FY2010 to BDT 148.8 billion in FY2012, primarily due to higher import prices and increased consumption.
• Subsidies for refined imported petroleum products jumped from BDT 1.84 billion in FY2010 to BDT 73.28 billion in FY2011, largely because of the use of diesel and furnace oil in rental power plants to address the power crisis.
• Electricity subsidies increased from BDT 8.0 billion in FY2010 to BDT 80.1 billion in FY2012, driven by a shift toward more expensive liquid fuel-based generation, which rose from 5 per cent of the mix in FY2010 to 17 per cent in FY2012.
• Poor agricultural households are the most vulnerable to kerosene price reforms, as kerosene accounts for 57.68 per cent of their total energy expenditure, primarily for crop irrigation.
• Energy expenditure as a percentage of household income is highest for the poor across all occupational groups, reaching 5.44 per cent for 'other' households.
• The most energy-intensive activities regarding petroleum products are electricity and water generation, railway transport, and basic chemicals, with electricity and water generation requiring BDT 128.24 per BDT 1,000 of output value.
• The report suggests that universal diesel subsidies are inefficient and that electricity subsidies are often regressive, recommending volume-differentiated tariffs and social safety nets as better alternatives for targeting the poor.

APA

Mujeri, M. K., Chowdhury, T. T., & Shahana, S. (2013). Energy Subsidies in Bangladesh: A profile of groups vulnerable to reform. International Institute for Sustainable Development. https://www.iisd.org/gsi/sites/default/files/ffs_stakeholders_bangladesh.pdf

Chicago

Mujeri, Mustafa K., Tahreen Tahrima Chowdhury, and Siban Shahana. Energy Subsidies in Bangladesh: A profile of groups vulnerable to reform. International Institute for Sustainable Development, 2013. https://www.iisd.org/gsi/sites/default/files/ffs_stakeholders_bangladesh.pdf.

Wikipedia

{{cite report |last1=Mujeri |first1=Mustafa K. |last2=Chowdhury |first2=Tahreen Tahrima |last3=Shahana |first3=Siban |title=Energy Subsidies in Bangladesh: A profile of groups vulnerable to reform |publisher=International Institute for Sustainable Development |date=August 2013 |url=https://www.iisd.org/gsi/sites/default/files/ffs_stakeholders_bangladesh.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mujeri2013energy, author = {Mujeri, Mustafa K. and Chowdhury, Tahreen Tahrima and Shahana, Siban}, title = {{Energy Subsidies in Bangladesh: A profile of groups vulnerable to reform}}, institution = {International Institute for Sustainable Development}, year = {2013}, month = aug, url = {https://www.iisd.org/gsi/sites/default/files/ffs_stakeholders_bangladesh.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }