From $665m to just $10m: Bangladesh almost rid itself of energy dues in a year

Bangladesh has nearly cleared all its dues for liquefied natural gas (LNG) imports, bringing down an outstanding bill of $665.76 million in August last year to just $10 million as of this week. Petrobangla confirmed that the remaining amount, owed to OQT, will be paid today, marking the end of the LNG payment backlog.

Just yesterday, Petrobangla paid $94.5 million in LNG import bills. Of this amount, $32 million was paid to QatarEnergy through the International Islamic Trade Finance Corporation based in Jeddah, while the remaining $62.54 million was paid to four spot market suppliers—Vitol Asia received $28 million, OQT $22 million, Excelerate LP $7.04 million, and Gunvor Singapore $5.5 million.

The progress in clearing dues has been notable during the eight-month tenure of the interim government. On 5 August last year, Bangladesh owed $237.55 million to Chevron, which was fully paid by 21 April. Long-term LNG suppliers QatarEnergy and Oman Trading Ltd were owed $317.48 million, now fully cleared. Outstanding dues from spot purchases, once $110.73 million, have dropped to just $10 million.

Officials from the Energy Division and Petrobangla said delays over the past three years were largely due to shrinking foreign currency reserves, which made it difficult to pay suppliers on time. As a result, LNG and oil suppliers began charging higher premiums, anticipating late payments.

Energy Adviser Muhammad Fouzul Kabir Khan said that effective management made the turnaround possible. He explained that cutting unnecessary energy projects and cracking down on waste, such as performance bonuses and excessive allowances, created financial space to pay off dues. Additionally, the government’s provision of sovereign guarantees allowed banks to secure dollars more easily.

The central bank also played a role by loosening restrictions and letting banks offer higher rates for remittances. This policy shift led to an increase in remittance inflow, boosting the availability of foreign currency. In FY24, remittances reached $23.92 billion, with $3.4 billion going to state-owned banks. In the three months after the interim government took over, remittance inflows totaled $7.03 billion, with state-owned banks receiving $2.06 billion.

A senior official from Janata Bank noted that the issue was mainly about liquidity. Once banks were able to bid more competitively for dollars, payments started flowing more smoothly.

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