DHAKA: Bangladesh is seeking billions in external financing to secure fuel and liquefied natural gas imports, as the new government led by Prime Minister Tarique Rahman moves to stabilise the economy amid a worsening global energy outlook due to the Iran conflict.
The nation of 175 million relies on imports for about 95 per cent of its energy needs, and state-run agencies have increasingly turned to the volatile market to plug the gap. The government has been rationing fuel, though the restrictions were eased for the Aidil Fitri festival.
Rashed Al Mahmud Titumir, the prime minister's adviser on finance and planning, said on Friday that Dhaka was in talks with major development lenders - including the Asian Development Bank (ADB), the World Bank, the International Islamic Trade Finance Corporation and Asian Infrastructure Investment Bank - to mobilise fresh funding.
"There are positive indications that we'll receive funds from the multilateral agencies to support oil and energy, which will help accelerate economic growth," Titumir told Reuters.
He said he expected about US$1.3 billion from the International Monetary Fund under an existing programme, along with an additional US$250 million to US$500 million on top of roughly US$500 million in budgetary support from the ADB.
"An IMF team is visiting... they were waiting for an elected government. We will request them to release the funds now, instead of July, so we receive them within the current fiscal year," he said.
The urgency has grown amid an escalating conflict in the Middle East that has roiled global energy markets, pushed up prices and increased concerns about supply routes.
"Our financing flow for oil and energy must not be disrupted under any circumstances," Titumir said. "We will ensure financing is available and diversify our sources of oil and energy."
He said Bangladesh was exploring procuring additional supply from the United States, South-East Asia, Nigeria and producers in the Middle East, to avoid over-reliance on a single source.
Despite rising global prices, Dhaka does not plan to pass the burden on to consumers, he said.
"We are not increasing fuel prices. We will provide the necessary financing so there is no contraction in the economy," Titumir said, stressing that the government aims to rely on multilateral support rather than private-sector borrowing.
Bangladesh adjusts government-set fuel prices each month, based on a global pricing formula. - Reuters
