Energy experts and business leaders have called on Bangladesh to urgently expand its fuel storage and refining capacity, warning that recent supply disruptions exposed critical vulnerabilities in the country’s energy system.
Speaking at a policy webinar organised by the Power and Participation Research Centre (PPRC), analysts said Bangladesh currently holds only 30 to 60 days’ worth of fuel reserves—insufficient to cushion against external shocks or market volatility.
AKM Zafar Ullah Khan, chairman of Padma Oil Company and a former energy secretary, said the country must prioritise storage expansion to ensure supply continuity during crises. He also urged the government to fast-track plans for a second unit at Eastern Refinery Limited, the country’s sole state-owned oil refinery.
At present, the refinery processes roughly 1.2 to 1.4 million tonnes of crude oil annually—equivalent to about one shipment per month. Planned upgrades could raise capacity by an additional 3 million tonnes, significantly improving domestic resilience, Khan noted.
Crisis exposes structural weaknesses
The discussion, titled “Is the Economy in the Energy Trap?”, highlighted how Bangladesh’s heavy reliance on imported fuel—combined with rising global prices and a shortage of US dollars—has put mounting pressure on the economy.
Participants said the recent crisis, which caused widespread hardship over the past two months, was exacerbated by panic buying and weak supply management. Demand for fuel surged rapidly as consumers and small businesses stockpiled amid uncertainty, while rationing measures proved insufficient to stabilise the market.
Experts argued that beyond short-term shocks, Bangladesh risks becoming trapped in a cycle of energy insecurity driven by structural constraints.
Economic impact and rising demand
Syed Mahmudul Huq, chairman of Trade Services International, warned that even modest increases in global oil prices carry significant fiscal consequences. “A $5 rise per barrel can add $400–500 million to national costs,” he said, stressing the need to diversify supply sources beyond traditional Middle Eastern markets.
Meanwhile, Professor A. Sattar Mandal pointed to rising energy demand in agriculture, noting that more than 4.2 million diesel-powered machines are already in use—a figure expected to grow alongside the farming sector.
Calls for diversification and reform
Panelists emphasised the need for a multi-pronged strategy combining immediate and long-term measures. In the short term, they recommended maximising output from existing coal-fired power plants and accelerating solar energy deployment.
They also called for increased competition in the liquefied petroleum gas (LPG) market, which is currently dominated by a handful of private firms, as well as expanded domestic gas exploration.
Mohammad Nazmul Haque, president of the Bangladesh Petrol Pump Owners Association, highlighted ongoing efforts to drill 140 new gas wells, describing it as a positive step towards reducing import dependence.
Policy gaps and communication failures
Speakers noted that inconsistent fuel distribution and heightened media coverage of localised shortages contributed to public anxiety, amplifying the perception of crisis. Better coordination and clearer communication, they said, are essential to managing both supply chains and public expectations.
Anwar-ul Alam Parvez, chairman of the Bangladesh Chamber of Industries, stressed the importance of integrated planning. He urged authorities to ensure efficient allocation of gas across sectors and to fully utilise available power generation capacity, including imports from India.
Long-term challenge
Concluding the session, PPRC Executive Chairman Dr Hossain Zillur Rahman warned that current measures remain overly focused on managing demand rather than addressing underlying weaknesses.
He said Bangladesh must strengthen medium-term planning, improve import strategies, and adopt a more diversified energy mix—including gas, coal and renewables—to avoid recurring crises.
The discussion ended with a consensus that Bangladesh’s energy challenges are not temporary disruptions but reflect deeper structural issues—requiring sustained policy reform, improved coordination, and long-term investment in energy security.