Rising prices loom amid fuel supply crunch
The newly elected BNP government is confronting one of its most pressing challenges: a deepening fuel crisis affecting households and businesses nationwide.
The ongoing Middle East conflict has disrupted global supply chains, prompting the government to seek alternative sources of fuel to meet domestic demand.
Despite assurances from authorities that there is no actual shortage and that panic buying has contributed to the situation, public concern remains high.
At the same time, the government faces pressure to comply with conditions tied to the next instalment of the $5.5 billion International Monetary Fund (IMF) loan programme, adding further complexity to the crisis.
A key condition of the ongoing IMF programme requires fuel prices to be adjusted
monthly in line with global market rates.
While Bangladesh has followed this mechanism over the past two years, it failed to adjust prices in February and March, drawing the IMF’s concern.
Government officials have indicated that it is too early to implement a hike, citing potential public backlash and the risk of higher inflation.
However, with global oil prices rising sharply due to the war, authorities are considering an increase to manage the growing fiscal deficit.
Sources suggest a modest price rise of Tk 5–10 per litre is under consideration, with a final decision expected before the World Bank–IMF Spring Meetings in Washington, starting 13 April.
Finance and Planning Minister Amir Khasru Mahmud Chowdhury will lead Bangladesh’s delegation to the meetings, where discussions will include the timing of the sixth and seventh loan disbursements.
While the Energy and Finance ministries have agreed in principle to the adjustment, the final decision rests with the Prime Minister.
A draft proposal is expected to be submitted shortly, allowing for prices to be revised imminently.
Officials note that the government is currently providing around Tk 167 crore in daily subsidies to the energy sector. Dr Ijaz Hossain, former dean of engineering at Bangladesh University of Engineering and Technology, told The New Nation that under current circumstances, a fuel price increase is unavoidable.
He highlighted that while India has mitigated price rises by cutting VAT for importers, Pakistan has opted to raise fuel costs.
The crisis extends beyond petroleum products. Authorities have expressed concerns over liquefied natural gas (LNG) and liquefied petroleum gas (LPG) supplies, as well as electricity generation to meet demand.
Over the past month, Bangladesh has imported more than 327,000 tonnes of fuel via 11 shipments, including roughly 280,000 tonnes of diesel, 22,000 tonnes of jet fuel, and 25,000 tonnes of furnace oil. An additional 22,000 tonnes of diesel arrived via pipeline from India.
However, eight other shipments, carrying approximately 385,000 tonnes of fuel—comprising 160,000 tonnes of diesel, 200,000 tonnes of crude oil, and 25,000 tonnes of jet fuel—failed to reach the country as scheduled, raising fears of further shortages.
While the government has attempted to stabilise supplies by sourcing fuel from alternative providers at higher costs, experts warn that the crisis could intensify in the coming months.
With global price volatility and ongoing supply disruptions, managing the energy sector has become a critical test for the BNP administration, which must balance public sentiment, fiscal constraints, and international obligations.
