Although fuel supply was maintained in March, reserves have nearly been depleted. To sustain supply in April, imports must be ensured according to schedule. There is confirmation of additional octane supply beyond demand. However, concerns are greatest over diesel—the most widely used fuel. The government is trying to import diesel from alternative sources.
Fuel imports are handled by the state-owned Bangladesh Petroleum Corporation (BPC). According to its sources, after supply on 29 March, diesel reserves stood at 133,000 tonnes—equivalent to about 10 days’ supply at current demand levels. Diesel demand in April is estimated at around 400,000 tonnes. However, about 95,000 tons of diesel may arrive within the next 15 days.
Sources at the Energy and Mineral Resources Division said that since the outbreak of war, fuel shipments have not been arriving on schedule. A total of 16 fuel-carrying vessels were scheduled to arrive in March, but only 10 have arrived so far. As of yesterday, the schedules of the remaining six diesel vessels were still unconfirmed. These vessels were expected to carry 155,000 tonnes of diesel, including one shipment that was also to bring 25,000 tonnes of jet fuel. There are also concerns about jet fuel reserves, which currently stand at only 16 days.
Two types of fuel are imported into the country. Refined fuels—such as diesel, octane, furnace oil, and jet fuel—are purchased from various countries. Crude oil, on the other hand, is imported from Saudi Arabia and the United Arab Emirates. This crude oil is refined at the country’s only state-owned refinery, Eastern Refinery Limited (ERL), producing diesel, petrol, furnace oil, and other fuels.
ERL produces an average of 60,000 tons of diesel per month. However, since the war in the Middle East began, imports of crude oil from Saudi Arabia and the UAE have stopped. Currently, ERL has usable reserves of 26,000 tons, enough for only six to seven days of production.
Speaking in parliament yesterday, State Minister for Power, Energy and Mineral Resources Iqbal Hasan Mahmud Tuku said there is no fuel shortage so far. Compared to last year, supply has increased, he said, adding that a tendency to purchase fuel beyond actual needs has artificially created shortages.
Efforts to Increase diesel imports
At a press conference organised yesterday by the Energy Division, it was stated that a vessel carrying 27,300 tons of diesel was scheduled to arrive at Chattogram Port last night.
Another vessel carrying 30,000 tons is expected to arrive on 3 April. Additionally, 7,000 tons of diesel from India are being added through the pipeline, and 11,000 tons will come from domestic sources.
Around 150,000 tons of diesel are expected to be added this month from China, Indonesia, and Singapore. Of this, two vessels carrying 60,000 tons from Indonesia are expected to arrive soon. Productive discussions have already been held to import additional diesel from India.
The Energy Division said the government is engaging with countries beyond the Middle East to ensure energy security. Alongside Singapore and Malaysia, importance is being given to importing refined and crude fuel from Nigeria, Azerbaijan, Kazakhstan, Angola, Australia, and the United States.
Discussions are also ongoing with Iran to secure permission and safety guarantees for Bangladeshi fuel vessels passing through the Strait of Hormuz. A positive decision is expected soon. Following a 30-day relaxation of US sanctions, an initiative has been taken to import 600,000 tons of diesel from Russia over the next two months.
Energy Division spokesperson (Joint Secretary) Monir Hossain Chowdhury said at the press conference that the country has adequate fuel reserves and there is no cause for concern. He added that diesel supply is being prioritised for farmers, based on lists maintained by upazila agriculture officers.
However, BPC sources warned that if the war persists, imports may be disrupted. Although different countries are supplying diesel, maintaining consistent supply is becoming difficult.
Most countries import crude oil from the Middle East, refine it, and then export diesel. As a result, there is uncertainty about receiving supplies on time. Even when alternative supply proposals are made, delivery is not guaranteed.
Octane supply to double demand
The Energy Division said diesel accounts for 63 per cent of the country’s fuel consumption, while petrol and octane each account for 6 per cent. Yet, long queues have been seen at filling stations for petrol and octane over the past month.
However, there is no risk of shortages in these fuels. Last fiscal year, 415,000 tons of octane were sold in the country, half of which was produced domestically and the rest imported. Petrol is entirely produced locally.
According to BPC, octane sales have increased compared to March last year, reducing reserves to seven days. Still, there is no concern over octane supply. Demand in April is estimated at 37,000 tons, of which 30,000 tons will come from private refineries. Additionally, 50,000 tons will be imported this month, with a shipment of 25,000 tons expected in the first week of April.
Officials said 462,000 tons of petrol were sold last fiscal year, all produced domestically. Of this, 16 per cent came from ERL and 84 per cent from private refineries.
As of 29 March, petrol reserves stand at eight days. Demand in April is estimated at 44,000 tons, with 35,000 tons expected from local sources. The remaining shortfall will be met by converting some octane into petrol.
Will fuel prices rise?
Today is the last day of the month, when fuel prices are typically adjusted. According to BPC sources, diesel is currently being sold at Tk 100 per litre.
If adjusted to reflect import costs, the price would be around Tk 200 per litre. Without a price increase, the government would have to provide subsidies of Tk 50 billion in just one month.
The energy minister told parliament that global diesel prices have risen by 98 per cent in a month. The current import cost of diesel is Tk 198 per litre. Although octane is sold at Tk 120 per litre, it costs the government Tk 150.72.
Responding to questions about price hikes, the Energy Division spokesperson said that fuel prices are adjusted monthly. A proposal for price increases for the coming month has already been submitted. Several scenarios have been presented, showing how much subsidy would be required at different price levels. These are now under review.
The Energy Division noted in its presentation that the Middle East conflict has entered its fourth week, creating an unprecedented global fuel crisis. Countries such as Sri Lanka, Pakistan, Nepal, Bhutan, the Maldives, and Afghanistan have already increased fuel prices—by as much as 25 per cent in some cases.
Energy expert M Tamim told Prothom Alo that diesel is the driving force of the economy and must be secured at all costs. At the same time, preparations must be made for potential shortages. Priority should be given to supplying diesel for irrigation and goods transport.
Any reduction in supply should be announced in advance. Various conservation measures must also be taken. “This is a global crisis— even developed countries are struggling. There is no scope to blame anyone. Everyone must work together,” he said.