Oil theft starts from ships

Incidents of oil theft from state-run oil companies are getting detected fairly regularly; investigation committees are formed. Yet the thefts do not stop.

A report from Jamuna Oil Company says that on 23 April 2020 in Rajshahi, several people including a company official were arrested by railway police while smuggling 5,000 litres of diesel from a rail wagon. That case from five years ago is still pending in court.

Eight years earlier, in July 2017, allegations surfaced that depot officials and employees were involved in the illicit sale of over 700,000 litres of diesel at Jamuna’s depot in Chandpur.

The next month an inquiry committee submitted a report and several employees were temporarily suspended. They remain suspended to this day, and the Anti-Corruption Commission (AC) is still investigating. But because the full network has not been identified, the thefts continue.

Bangladesh Petroleum Corporation (BPC) is responsible for importing and producing fuel oil. Three BPC-run companies — Padma, Meghna and Jamuna — sell that oil in the market and receive a fixed commission from sales.

Profit or loss on oil sales is borne by BPC. After deducting certain operational losses, the companies must settle the oil sales accounts.

Oil companies have room to record two kinds of losses. One is a temperature-related conversion loss. BPC measures oil at 15°C when purchasing, but during domestic supply they measure at 30°C.

A senior BPC official provides an example: due to this temperature difference, 30,000 tonnes of oil can register as 30,300 tonnes. Except for the three winter months, oil volumes increase in most months of the year. Thieves know this scientific fact and exploit it.

The other is routine operational loss. Combined, they are allowed up to 0.30 per cent as operational loss. In year-end accounts, actual losses are usually lower than that, though the books contain various discrepancies.

Prothom Alo collected and analysed Jamuna Oil Company’s oil accounts for the last year (2024–25) for its Fatulla, Daulatpur and Baghbari depots. Baghbari’s records show that during the conversion period (October–March, when temperatures are lower) their total oil volumes fell; in the other six months volumes rose.

The biggest drop was in January — nearly one per cent, equivalent to about 225,000 litres — although operational measurements that month showed an increase of 13,437 litres.

Daulatpur Depot’s ledger shows conversion losses from September to April, while operational measures increased in those eight months.

In April, conversion showed a loss of 53,000 litres while operational measurement rose by 96,000 litres, so overall there was no net loss that month. Fatulla depot’s records show conversion losses from December through March, while in the other eight months their oil increased.

Company officials say they record less waste than BPC’s permitted operational loss. So how does theft still happen? Though officials show proper figures on paper, some of them admit that oil theft continues in practice.

To find how oil is stolen, Prothom Alo spoke with BPC and oil company officials, ship crews, jetty staff involved in oil unloading, and depot employees.

They say a major method is falsifying calibration reports or storage capacity documents. Bangladesh Standards and Testing Institution (BSTI) certifies tank, lorry and ship capacity after testing; the theft networks manipulate that certification to understate capacity. If the stated capacity is lowered by fraud, the actual usable capacity can be used to siphon extra oil.

In August, Jamuna’s Daulatpur depot was found to have a capacity-fraud incident: a lorry with 13,500 litres capacity had been registered as 9,000 litres in a contract by Jamuna.

The contract was cancelled after being caught. Also, in a case last month nearly 375,000 litres of diesel reportedly disappeared from Jamuna’s Fatulla depot, bringing capacity-fraud to attention again. Jamuna has ordered two depot tanks to be re-tested for capacity.

There are also opportunities for theft when measuring oil at depots. Sources say oil is still measured by traditional methods — manually taking depth readings with a rod. Measuring a tank, tank-lorry or ship depth by a few millimetres’ difference can create a theft of 300 to 590 litres per reading.

Temperature increases cause fuel oil to expand and decreases cause contraction; this is a scientific fact exploited by theft rings. At depots, oil is measured once in the morning and once in the evening.

Because morning and afternoon temperatures differ, oil depth naturally exapnads later in the day. If that entire incremental amount is not shown, it is effectively stolen.

More alarming is the practice of mixing adulterant (cheap, low-quality) oil to increase apparent volume. Low-cost adulterant oil is brought to depots and mixed with petrol and octane.

Customers have complained about adulterated fuel; pumps are occasionally fined after raids, yet the depot-to-market trade in adulterated oil has not stopped and there have been no major depot raids.

On 12 October, the Bangladesh Petroleum Dealers, Distributors, Agents and Petrol Pump Owners Association wrote to BPC complaining about fuel quality from depots: they said the three companies’ fuel quality varies, petrol and octane are corroding motorcycle and car tanks, depot storage tanks show rust, and fuel dispensed is not measured correctly.

The colour and quality of fuels have changed; such a situation hadn’t occurred before. Due to thin fuel causing dispenser problems, certain octane grades often can’t be supplied from 10:00 am to 5:00 pm Diesel quality is also very poor compared to the past.

Earlier on 1 September, the Bangladesh Fuel Oil Distributors Association wrote to Padma Oil Company over complaints about poor-quality fuel from Padma’s Daulatpur depot: petrol and octane arriving from that depot in Khulna were reported to have a strong odour and poor mileage for motorcycles.

Sajjadul Karim Kabul, president of the Petrol Pump Owners’ Association, told Prothom Alo that BSTI fines petrol pumps but does not inspect depots. Thin fuel is being supplied from depots.

In May, an internal secret report was sent to BPC’s Fuel Division about oil theft in Chattogram. It states that large tankers arriving from abroad initially transship oil into smaller vessels, which then bring it to the main depots’ terminals located in Gupta canal.

From the depot the oil is distributed in four stages, mostly transported by river on small ships. The report notes that on nearly every vessel there is a secret spot where 800 to 1,000 litres more than the declared capacity can be taken. Train wagons also receive extra oil; each tanker lorry in the chain is loaded with an extra 150–200 litres. Even when filling drums, an extra 15–20 litres is sometimes added.

The report says oil stolen from ships on the Karnaphuli River is being trafficked to local wholesale and retail markets in Potia, Shantirhat, Moijjarttek, Chaktai, Khatunganj and elsewhere. Theft on the Karnaphuli begins after dusk.

Sources identify two major theft hubs: the three companies’ main depots in Patenga, Chattogram, and the Fatulla and Godnail depots near Narayanganj. If surveillance is ensured at these two zones, theft would be greatly reduced.

Padma and Meghna have depots in Godnail, Siddhirganj, Narayanganj. An intelligence agency produced a report for the Fuel Division after probing the area.

It says some filling stations are involved in the theft: with a petrol or diesel purchase receipt they load octane into a vehicle and later reconcile the extra amount with supposed technical losses and temperature increases.

Pump owners financially benefit from the theft network. Adulteration at depots also increases volumes. During an investigation one tanker was loaded 22,000 litres against a consignment of 18,000 litres; another was given 13,500 litres against a declared 9,000 litres. The report names 4 tanker lorries and 7 filling stations used in the theft.

The report also states that 129 tanker-lorries supply fuel from Padma’s depot to the airport. Each vehicle does two trips a day and supplies 20 litres less per trip, resulting in 5,160 litres stolen daily. The stolen fuel is taken out through 17–18 designated tanker lorries and supplied to dealers in the ring. The report gives the numbers of 14 tanker-lorries involved in taking extra volumes over consignments. In Meghna’s Godnail depot the daily dispatch is 1.35 million litres, with system loss reported between 4,050 and 6,750 litres.

Padma’s depot dispatches an average 2,560,000 litres per day, with system loss 7,680 to 12,800 litres. Together the two depots are estimated to lose 13,500 litres daily to theft — equivalent to BDT 445 million at current market rates annually. Many depot staff are implicated; leadership is said to involve union leaders, depot and point-in-charge officials and meter readers.

Across the country the three companies run 47 depots. Even if Godnail-like theft rates are detected elsewhere, total annual oil theft amounts to several billions taka. The report recommends examining the asset history of depot officers and employees over the past 15 years and taking necessary measures. It also says that automating the entire fuel distribution system would enable better monitoring and control of theft.

BPC Chairman Aminul Ahsan told Prothom Alo that unless the marketing process is fully automated, irregularities will remain. Automation is being implemented step by step. Flow meters are being installed at depots so depth-measure-based dispensing will stop. Fatulla and Godnail depots will be automated; then oil cannot be over- or under-delivered. Machines are being installed for fuel quality testing. Officials are being rotated. Irregularities have reduced compared with before.

As fuel demand rises, sales should increase annually. BPC sources say sales rose 14 per cent in FY 2020–21 compared with the previous year, 10 per cent in 2021–22, but fell 8 per cent in 2023–24, and rose only 1 per cent in 2024–25.

Insiders contend that actual market sales are higher because adulterated low-cost fuel is mixed and sold, obscuring real figures.

On 28 August, BPC issued letters to the three companies with directives to stop corruption at depots and to halt syndicate theft on the Karnaphuli River. The letters instructed replacing rod stick-based manual measurement with automated systems, automating BPC and company operations, conducting regular inspections when loading tanker-lorries, ships and rail wagons, and routinely testing and verifying fuel quality at main storage and depots. BSTI-specified capacity must be ensured when supplying tanker-lorries from depots.

A follow-up letter on 29 September urged rapid implementation: use up-to-date tanker-lorry capacity reports for dispensing, establish modern labs to prevent adulteration, regularly monitor depot-to-filling-station transfers to prevent illegal sourcing and sales, and automate depot operations including Chattogram’s main installations to stop irregularities, adulteration and theft.

Previously the last government had planned to automate all fuel depots and called for tenders, but the process stalled. BPC now says it is gradually automating various depots.

M Tamim, special assistant on fuel affairs to the former caretaker government’s chief adviser, told Prothom Alo that there are huge accounting frauds in fuel. Paperwork is kept in order but proper audits are not done; hence theft details remain unknown. Temperature-linked expansion of fuel leads to extra value that vanishes into pockets. Traditional measurement methods are also subject to cheating. The fuel marke