A National Framework to Monitor the Economy-wide Effects of Fossil Fuel Price Shocks: An Appraisal
Citation: Raihan, S. & Ahmed, M. T. (2026). A National Framework to Monitor the Economy-wide Effects of Fossil Fuel Price Shocks: An Appraisal. SANEM Publications, Dhaka, Bangladesh.
Bangladesh’s reliance on imported fossil fuels exposes its economy to global price volatility. This causes inflation, fiscal strain, exchange rate instability, and household welfare losses. Without a systematic mechanism for monitoring and responding, policy interventions remain reactive and fragmented. This appraisal introduces a National Framework to Monitor Economy-wide Effects of Fossil Fuel Price Shocks, shifting Bangladesh toward proactive, evidence-based energy risk management.
The framework establishes a three-tier governance structure comprising a National Coordination Committee for strategic leadership, a GED Technical Secretariat as the analytical hub, and a Technical Working Group for data coordination and validation. It tracks a comprehensive set of indicators across energy prices, macroeconomic variables, household welfare, and policy instruments, drawing on data from Bangladesh Bank, BBS, NBR, BERC, and international sources. Advanced analytical tools, including VAR, SVAR, Input-Output models, SAM, CGE, and microsimulation, underpin its assessments. By institutionalizing systematic monitoring and evidence-based response mechanisms, the framework will enable more accurate forecasting, timely interventions, and informed policy decisions that strengthen economic resilience. A structured four-tier policy response mechanism links monitoring outcomes to macroeconomic stabilization, sectoral support, household protection, and guidance on energy transition.
Implementation proceeds across three phases over twelve months, requiring dedicated human resources, technical infrastructure, and sustained budgetary commitment to ensure long-term institutional effectiveness. Relevant stakeholders need to act collectively and urgently to support the establishment of this framework, setting Bangladesh on a path towards more resilient and effective energy risk management. Through these investments, the framework will provide Bangladesh with a sustainable foundation for anticipating, mitigating, and managing the economic impacts of fossil fuel price shocks.
