Gulf tensions spark fuel subsidies and power cuts across Bangladesh and Pakistan

Attacks on Iranian oil facilities and fighting between Saudi Arabia and Iran-backed Houthis have choked oil and gas shipments through the Strait of Hormuz and the Red Sea, sending Asian spot LNG prices back toward $30 per MMBtu. Bangladesh, which imports over 40% of its electricity as LNG, now endures rolling blackouts, factory shutdowns and reduced garment orders, with firms like Fatullah Apparels paying extra for air freight and diesel to keep operations alive.

The Power Minister Iqbal Hasan Mahmud has called for repairs at a non-functional LNG terminal to improve supply. In Pakistan, the government introduced a fuel-relief program that caps subsidies at 100 rupees per litre for two-wheelers and small vehicles, but bureaucratic registration requirements have frustrated riders such as Karachi resident Mohammad Musharraf. Analysts warn that both countries’ limited fiscal space makes it difficult to sustain large-scale subsidies, leaving households and businesses to bear the brunt of higher energy costs.