Bangladesh is facing mounting fiscal pressure as it absorbs steep losses on fuel subsidies, with officials estimating monthly costs of up to Tk 3,000 crore following rising import prices linked to the Iran–Israel conflict.
Speaking in Dhaka, Monir Chowdhury, spokesperson of the Energy and Mineral Resources Division said diesel is currently being sold at Tk 100 per litre—well below the Tk 155 indicated by the government’s dynamic pricing model. The gap underscores the scale of the subsidy burden at a time of heightened global energy uncertainty.
Despite the losses, the government has opted against raising fuel prices in April, signalling concern over the inflationary impact on households and industry. Authorities say the situation remains under review.
Enforcement drive targets illegal fuel trade
Alongside subsidy pressures, the government has intensified efforts to curb illegal fuel storage and distribution. More than 7,342 enforcement drives have been carried out nationwide, resulting in 3011 cases and fines totalling Tk 1.44 crore.
Dozens of individuals have been jailed, while large volumes of fuel—amounting to more than 443,000 litres—have been seized, including diesel, octane and petrol.
Officials say the crackdown is aimed at stabilising supply chains and preventing market distortions at a time of elevated prices.
Supply outlook remains stable
Despite global volatility, authorities have sought to reassure consumers that there is no immediate risk of shortages. Stocks held by the Bangladesh Petroleum Corporation remain robust, supplemented by recent fuel shipments.
Officials maintain that petrol and octane supplies are sufficient for at least the next two months. However, they have warned that panic buying could place unnecessary strain on distribution systems.
Uncertainty in global markets continues to centre on the Strait of Hormuz, a key fuel transit route, with any disruption likely to have significant implications for import-dependent economies such as Bangladesh.
Long-term reforms under consideration
In response to ongoing challenges, the government is weighing plans to expand national fuel storage capacity to cover a minimum of three months’ demand, a move intended to improve resilience against external shocks.
Authorities have also launched a pilot digital monitoring system, known as “Fuel Pass”, which uses QR codes to regulate refuelling and enhance transparency. The scheme is currently being trialled at selected filling stations in the capital.