Additional $4 billion spent in energy bills due to Iran war: Khosru

The government has burnt through additional $4 to $5 billion in fuel import bills since March owing to the Iran-war related global supply disruptions, said Finance Minister Amir Khosru Mahmud Chowdhury on Saturday.

The government is prioritising solar energy to stabilize the country’s precarious energy situation and has included various incentives in the national budget to this end, the finance minister said, urging private investment in the renewable energy sector.

The minister made the remarks as the chief guest at a seminar titled “Biannual Economic Situation of FY2026: Context of Fiscal and Monetary Policy and Private Sector Expectations” held at the DCCI auditorium in the capital’s Motijheel. Business leaders, economists, researchers and senior policymakers attended the event.

The finance minister said the ongoing crisis in the power and energy sectors will take time. For the time being, the government was working towards ensuring fuel reserves to cover three months’ demand, he added.

To this end, the government has also given additional emphasis on integrating different sources of energy.

Regarding the crisis in the banking and financial sector, Khosru said the government has already announced Tk60,000 crore stimulus package to prop up the sector. No political grounds will be considered for extending the stimulus, he added.

On reviving investment in the economy, the finance minister said foreign investors won’t come if domestic investment stays weak.

The government would resolve the current hurdles in the investment and business environment, Khosru said, adding “deregulation” of procedures remains a core element of the crisis management process.

However, “deregulation” is easier said than done, the minister warned.

Nonetheless, the government remains committed to addressing the impediments to “deregulation,” he added.

For a stable and expanding economy, the tax-to-GDP ratio must also be reduced, Khosru said, noting automation is indispensable to increasing the ratio.

The government is also working to raise funds from alternative routes, including through a strengthened capital market. The people of the country would soon enjoy positive results from a reformed capital market, Khosru further said.

Economist Hossain Zillur Rahman said the country now stands at a crossroad of economic development. Failure to take the right decision at this moment, could result in reduced economic growth potential, and would rather increase the chances of “economic reversal,” Zillur Rahman said.

The “harassments” faced in various stages of economic activities has created a “negative ecosystem,” which is diminishing the impact of reforms, Zillur Rahman said.

In particular, tax reforms will invariably face hurdles from these “harassments.” The government’s “goodwill” is essential to reducing these “harassments,” if authorities wish to expand the tax net, the economist added.