Petrol is produced locally—so why is there a shortage?

Many people have experienced the message “No petrol” at filling stations over the past month. The Iran war has created a global fuel crisis. But in Bangladesh, domestic production is enough to meet petrol demand. So naturally the question arises: what is causing the shortage? There are shortage of supply of Diesel and also octane fuels. This raises curiosity: what exactly is petrol, and how is it different from octane?

Petrol is a type of liquid fuel. It is produced by refining crude oil and condensate, a byproduct of natural gas, obtained from gas fields.

Sources from petrol pump owners and oil companies say petrol is mainly used as fuel for motorcycles. Some older cars also run on petrol because their engines are designed for it, especially certain Indian car models. Autorickshaws, tempos, and some small vehicles like the Leguna also use petrol. In addition, some petrol-powered machines are used for tasks such as grass cutting.

There is no structural difference between petrol and octane; the difference lies in quality. High-quality petrol is called octane.

The octane rating in fuels indicates quality. High-grade motor gasoline has a higher octane rating. Petrol with an octane rating of 92–95 is called octane, while 80–87 is standard petrol.

According to Bangladesh Petroleum Corporation (BPC), the government agency overseeing fuel import, production, and supply, 462,000 tons of petrol were sold last fiscal year. During the same period, 415,000 tons of octane were sold. Diesel has the highest demand among fuels; in FY 2024–25, the country’s diesel demand was 4.35 million tons.

All domestic petrol demand is met through local production. Last fiscal year, 16 per cent came from the state-owned Eastern Refinery Limited (ERL) in Chattogram, and the remaining 84 per cent was supplied by private refineries.

ERL imports 1.5 million tons of crude oil annually from the UAE and Saudi Arabia, producing petrol, diesel, furnace oil, and other fuels. Due to the ongoing war, imports are currently halted. A decrease in crude imports affects petrol production.

ERL sources say their crude stock is running low. A shipment of 100,000 tons from Saudi Arabia is expected; if it is delayed, ERL’s production could stop temporarily, causing some petrol shortages.

Private refineries, however, meet most petrol demand. BPC purchases petrol regularly from four private refineries: Super Petrochemical Ltd and Partex Petro Ltd in Chattogram, Aqua Refinery Ltd in Narsingdi, and Petromax Refinery Ltd in Bagerhat. They refine imported or locally produced condensate into petrol.

As of 3 April, BPC reported petrol stock at 12,756 tons—enough for nine days. New supplies are added daily. April’s petrol demand is estimated at 44,000 tons, with 35,000 tons coming from domestic refineries. Even if there is a slight shortfall, double the amount of octane will be converted to petrol to meet demand, so no petrol imports are planned this year.

Super Petrochemical, part of the Tk Group, produces the most petrol and octane in the private sector from condensate and naphtha. MD Mohammad Mustafa Haider told Prothom Alo that raw material supplies are secured to maintain April–May production, but supplies for June are not yet available, so production for that month is uncertain.

Despite adequate stock, the petrol shortage is attributed to “panic buying.”
After Israel and the US attacked Iran on 28 February, global fuel markets became volatile. Panic buying increased, leading the government to implement rationing at filling stations in early March. Even though rationing has ended, long queues persist.

BPC data shows that from 1–4 March, 9,380 tons of petrol were sold, compared to 6,480 tons during the same period last year—a 45 per cent increase in demand.

Mir Ahsan Uddin, Secretary of a faction of the Bangladesh Petrol Pump Owners Association, told Prothom Alo that the government is supplying sufficient fuel, but excess demand at pumps creates long lines.

While supply is said to be adequate, BPC data shows petrol supply in March dropped about 15 per cent compared to last year. Last March, average daily sales were 1,496 tons; this March, 1,271 tons per day.
Petrol hoarding is also being reported. Authorities have recovered stockpiled petrol during raids at various locations.