Where Bangladesh imports diesel from, and how much comes from India

Bangladesh once imported almost all of its diesel from the Middle East. Most shipments mainly arrived by sea from Kuwait. Over the past two decades, however, the sources of imports have changed significantly. Several Southeast Asian countries have now emerged as major suppliers, while a notable amount also comes from India.

Import data from the National Board of Revenue (NBR) shows that in the 2006–07 fiscal year, about 91 per cent of the diesel imported by the Bangladesh Petroleum Corporation (BPC) came from Kuwait. India accounted for the remaining 9 per cent at the time.

Within a decade, the situation began to shift. Singapore rapidly moved up the list of diesel suppliers and eventually became the leading source. At the same time, Malaysia, China, the United Arab Emirates (UAE), Saudi Arabia and several other countries were added to the list of suppliers.

The sources of imports have become even more diversified now. In the first eight months of the current fiscal year (July–February), Bangladesh imported around 2.3 million tonnes of diesel. Of this amount, 41 per cent came from Singapore and 24 per cent from Malaysia. As a result, dependence on Middle Eastern countries has declined significantly.

Two decades ago, a large share of diesel imports came through government-to-government (G2G) agreements. At that time, Middle Eastern countries were the primary suppliers. Gradually, however, around 50 per cent of diesel began to be purchased through competitive international tenders.

This increased the number of suppliers and diversified the sources of imports. It is worth noting that diesel is still imported solely by the government sector, with the Bangladesh Petroleum Corporation (BPC) handling the imports.

Diesel is the most widely used fuel in the country’s energy system. A large portion of transports—buses, trucks, pickups, covered vans and cargo vehicles—runs on diesel.

The fuel is also used to operate irrigation equipment in agriculture, run engine-powered boats on inland waterways and power generators in many industries. During electricity shortages, some power plants also rely on diesel.

As a result, transport, agriculture, industry and electricity generation all depend heavily on this fuel. About 24 per cent of the country’s diesel is used in agriculture.

According to BPC data, diesel accounts for about 63 per cent of the country’s total fuel demand. In the 2024–25 fiscal year, the demand for diesel was about 4.35 million tonnes. A large portion of this demand is met through direct imports, while about 700,000 to 750,000 tonnes are produced annually by refining crude oil.

Although the sources of diesel imports have changed, imports from India have not followed a single consistent trend. At times they have decreased, while at other times they have increased.

According to NBR data, 9 per cent of the diesel imported into the country in the 2006–07 fiscal year came from India. For several years afterward, the share remained in single digits, though it later reached double-digit levels in some years.

Over the past five years, India’s share was highest in the 2023–24 fiscal year. That year, about 551,000 tonnes of diesel were imported from India, accounting for nearly 15 per cent of total imports.

The amount has decreased somewhat since then. In the last fiscal year, imports from India stood at around 448,000 tonnes, while about 333,000 tonnes arrived in the first eight months of the current fiscal year.

Several companies, including India’s state-owned Indian Oil Corporation Limited, supply diesel to Bangladesh. To facilitate imports from India, the two countries built the Bangladesh–India Friendship Pipeline.

The nearly 130-kilometre pipeline, constructed with Indian financing, was launched in December 2022. Through this pipeline, diesel from the Numaligarh refinery in India is delivered directly to the depot in Parbatipur, Dinajpur. Shipments reach Bangladesh within two days of being sent through the pipeline.

Recently, a shipment of 5,000 tonnes of diesel arrived in Bangladesh through the pipeline. Under the agreement, about 180,000 tonnes of diesel can be imported annually in this way.

The diversification of diesel import sources has also reduced supply risks. In the past, heavy dependence on the Middle East meant that any instability in the Strait of Hormuz could create pressure on fuel supplies.

Now Bangladesh imports diesel from several countries including Singapore, Malaysia, China, Indonesia and India. As a result, even if problems arise in one region, supplies can be ensured from alternative sources.

State Minister for Power, Energy and Mineral Resources Anindya Islam said that Bangladesh now has multiple sources for diesel imports. In addition to G2G agreements, diesel is also being purchased through competitive tenders, which has reduced the risk of major supply disruptions. Diesel can also be brought easily through the pipeline from the Numaligarh refinery in India.

“We are starting the process to import 120,000 tonnes of oil from Brunei. At the same time, imports from the United States will also be possible. This will further diversify the sources of imports,” he added.