Private fuel imports trigger concern
The government’s plan to open refined fuel imports and distribution to private companies has triggered concerns that control of the strategically important market could become concentrated in the hands of a few large business groups, prompting calls for greater transparency, consultation and regulatory safeguards.
The proposed policy would allow private companies to import, store, transport, distribute and market refined petroleum products.
While the government says the initiative is intended to strengthen supply security and curb black marketing, energy experts, economists and political parties have questioned the speed and transparency of the process.
Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmood defended the initiative on Tuesday, saying greater private-sector participation in fuel distribution would help prevent supply disruptions and curb black-market activities.
Speaking at a seminar titled “Crisis in the Fuel Sector: Prospects and Path Forward”, organised by the Forum for Energy Reporters Bangladesh (FERB) at Dhaka Club, he said the proposed policy was not intended to benefit any particular company and would apply uniformly once the broader legal framework was finalised.
The minister said Bangladesh had not experienced an actual fuel shortage despite concerns arising from the conflict in the Middle East, as the country maintained sufficient reserves.
He also said the government was pursuing several measures to address the ongoing gas crisis, acknowledging the difficulties faced by textile exporters when low gas pressure forces them to turn away orders from buyers.
Such disruptions can place significant pressure on businesses’ cash flows, he said.
Iqbal added that a foreign delegation had recently visited Bhola to explore possible cooperation in the gas sector.
This was followed by online discussions between Bangladeshi and foreign counterparts, while a government delegation had also travelled abroad for related discussions and returned on Monday.
Experts warn of market concentration
Economist and energy analyst Anu Muhammad warned that allowing private companies to import fuel could eventually place control of a strategic sector in the hands of a small number of large conglomerates.
Such concentration, he said, could create conditions for monopoly or cartel behaviour and potentially undermine Bangladesh’s long-term energy security.
Engineer, writer and power, energy and development economics analyst Kallol Mustafa has also urged the government to reconsider the proposal before allowing private companies to enter fuel imports, according to his recent writings in the media.
M Shamsul Alam, energy adviser to the Consumers Association of Bangladesh, criticised the pace at which the initiative was being pursued.
He said Bangladesh Petroleum Corporation (BPC) was initially given only two days to respond to the private-sector proposal before being asked to prepare a broader guideline within another four days.
Major changes in a strategically important sector such as energy, he argued, require rigorous assessment, stakeholder consultation and institutional scrutiny rather than a compressed decision-making process.
Shamsul Alam also rejected the government’s argument that greater private-sector participation would reduce the subsidy burden.
He said the claim was neither realistic nor evidence-based, arguing that private operators would seek to maximise profits, potentially increasing costs and consumer prices rather than lowering them.
Some analysts have also raised concerns about fuel quality, warning that inadequate regulatory oversight could allow substandard products into the market, potentially damaging vehicle engines and imposing wider economic costs.
Others have argued that the government should first improve the capacity, transparency and efficiency of BPC and state-owned refineries before opening the sector further to private operators.
Some analysts, however, believe a competitive market could be developed if private participation is accompanied by strong regulatory safeguards.
Political opposition
Bangladesh Jamaat-e-Islami has called for an immediate suspension of the initiative, describing it as “a transfer, not reform” and warning that it could create private monopolies.
At a recent press briefing, the party alleged that a new policy was being prepared to allow private companies to import and market refined fuel. It argued that the move could concentrate the market among a few business groups rather than foster genuine competition.
The party pointed out that fuel imports on a large scale require access to deep-sea ports, a Single Point Mooring, large storage terminals, pipelines and financing worth hundreds of millions of dollars — infrastructure and capital it said were available to only three or four groups in Bangladesh.
Jamaat called for the draft policy to be made public and for at least 60 days of open consultation with stakeholders before any decision is finalised.
Reports suggest that the initiative gained momentum after the newly appointed BPC chairman was instructed, only four days after taking office, to prepare a draft policy allowing private-sector participation in refined fuel import, storage, transport, distribution and marketing.
The proposal is understood to have originated with Bashundhara Group, which has offered to handle nearly half of the country’s fuel demand.
The debate has therefore centred on whether greater private participation can improve supply security and efficiency without creating excessive market concentration, with experts and political groups calling for a transparent process and robust regulatory framework before the policy is finalised.
