Summit Group Founder's Case for Privatizing Bangladesh's Energy Middlemen

When QatarEnergy invoked force majeure on March 2, 2026, Bangladesh's state gas procurement agency watched its planned LNG supply for April disappear, cargo by cargo, over the next four days. Three other suppliers followed within the week.

Petrobangla turned to the spot market and found prices above $23 per MMBtu, more than double the contracted rates it had just lost. The shortfall translated quickly into factory curtailments, CNG rationing, and extended daily power outages.

The episode exposed the mechanics of an arrangement that Muhammed Aziz Khan, chairman of the energy conglomerate Summit Group, had been drawing attention to in the preceding months. Bangladesh's energy procurement sits almost entirely within two state entities: Bangladesh Petroleum Corporation and Petrobangla's procurement subsidiary RPGCL. These entities carry the country's full exposure to commodity price swings and supply disruptions without the commercial flexibility a more distributed structure would provide.

Khan's argument, made in a February op-ed in The Business Standard and elaborated in an April 3interview with S&P Global Commodity Insights, is that corporatizing or partially privatizing these entities would transfer logistics risk and price exposure to capable private operators while reducing the subsidy burden the government has struggled to contain.

"Privatization is key to securing foreign direct investment," Khan told S&P Global. "LNG import, energy oil import and distribution infrastructures may be a first step toward that."

In FY2024-25, Bangladesh's power sector subsidy bill was projected to rise 55% year-on-year, even as electricity tariffs climbed more than 20% over the prior year. Between February and April 2025, oil-fired generation consumed 29.27% of total fuel costs while contributing only 10.27% of grid power.

The argument is that inefficiency is embedded in the state procurement model. Agencies operating under policy constraints face different incentives than commercial operators managing their own balance sheets.

Khan grounds the argument in Bangladesh's own policy record. The country imports millions of tonnes of food grains and edible oils annually through private traders. Procurement is competitive. Supply continuity has held without the state carrying the price exposure. The energy sector runs on a different model. Procurement authority is concentrated. A single government agency absorbs price and currency risk, with limited private involvement at the import stage. Khan's argument is that the difference reflects a policy choice, not a technical constraint.

The private power generation framework established in 1996 has delivered complex infrastructure reliably for three decades. Bangladesh's LNG import infrastructure is already managed by private operators. Summit's FSRU, in operation since April 2019, has received approximately 35 million cubic metres of LNG and supplied roughly 785 million MMBtu to the national gas grid.

The terminal covers around 13% of the country's total gas demand and completed its 250th ship-to-ship transfer in 2025. Private participation in energy infrastructure already works at scale. Khan's argument is that the model should extend upstream, into procurement itself.

The procurement architecture he is challenging contrasts with how major LNG importers structure their buying operations. Economies with more distributed procurement models spread negotiating power and supplier relationships across multiple commercial actors. When one supply route closes, parallel channels can remain active. Bangladesh's current structure concentrates that exposure in one place.

The ongoing Hormuz crisis has tested it directly. Petrobangla was forced to negotiate emergency spot purchases under acute time pressure, in a market where better-positioned buyers had already secured the available cargoes.

Corporatizing or partially privatizing BPC and RPGCL would change those incentive structures, argues Khan. Private operators face their own balance sheets and have clearer incentives to build diversified supplier relationships and strategic storage. The Hormuz crisis showed what the current structure costs when those capabilities are absent.

Khan told S&P Global that Bangladesh's LNG imports are expected to reach 7.2 million metric tonnes per year in 2026 and could rise toward 15 million in the coming years. State entities carrying the existing subsidy burden are not positioned to attract the investment that expansion requires on commercial terms. Private procurement entities operating under commercial governance present a different risk profile to international lenders and equity investors than agencies embedded in a subsidized pricing system.

Bangladesh reached 100% electricity access through a generation model that put project risk on private operators and required them to source their own financing. That framework delivered. Khan's privatization argument applies the same logic to procurement, where the state currently absorbs risks that private capital could carry more efficiently. The Hormuz crisis has made the structural case harder to defer.