Bangladesh Petroleum Corporation (BPC) has come under fire for proposing to sell furnace oil at higher prices, with the Bangladesh Power Development Board (BPDB) insisting that rates should be aligned with international market levels to contain electricity generation costs.
At the first-ever public hearing on furnace oil pricing on Thursday, the BPDB high-ups alleged that the board’s piled-up losses mainly come from the high price, which is increasing the government’s subsidy burden.
BPC has proposed fixing the furnace oil price at Tk 81 per litre, while BPDB argues that, based on global benchmarks, the price should not exceed Tk 50.82 per litre.
The Bangladesh Energy Regulatory Commission (BERC)’s technical committee has suggested reducing the existing price of Tk 86 per litre to Tk 74.04 after analysing available data.
At the hearing, BERC chairman Jalal Ahmed said the commission would examine all submissions before issuing a final order. “No party will be unfairly favoured or disadvantaged. Our decision will ensure a win-win outcome for all stakeholders,” he said.
Consumer representatives at the hearing held at BERC conference room expressed strong dissatisfaction over the high price and questioned BPC’s pricing formula.
Explaining BPC’s position, general manager ATM Selim said the price adjustment proposal was submitted in January 2025, when international furnace oil prices stood at $478.45 per barrel and were on a downward trend.
He noted that prices fell to $340.94 per barrel in December. “Taking into account duties and other associated costs, we are now proposing Tk 81 per litre,” he said.
BPDB strongly disputed BPC’s calculations, saying the pricing structure had pushed the power utility into deep losses while allowing BPC to remain profitable.
BPDB director Jahangir Alam Mollah said BPC earned Tk 43.16 billion in profit in FY2024–25 from selling furnace oil to BPDB, while the power board incurred a loss of Tk 170.21 billion despite receiving Tk 386.37 billion in government subsidies.
He said private power producers importing furnace oil directly paid around Tk 57 per litre in December 2025, compared with Tk 86 per litre charged by BPC. Electricity generation using furnace oil costs Tk 18.41 per unit, whereas BPDB sells power at a wholesale rate of Tk 6.99 per unit.
“Considering consumers’ interests, electricity tariffs cannot be increased further,” he said, warning that failure to cut furnace oil prices could disrupt power supply during the coming summer.
BPDB chairman engineer Md Rezaul Karim echoed the concerns, saying imported fuel was significantly cheaper and that furnace oil prices were a key driver of rising generation costs.
“Prices should be adjusted in line with market realities to provide relief to the public,” he said, adding that while no state-owned company should be forced into losses, one entity should not profit at the expense of another.
Responding to the criticism, BPC said that although BPDB’s international price references might be broadly correct, they did not fully account for duties, taxes and other operational costs.
The hearing also addressed distribution margins. State-owned fuel marketing companies—Padma Oil Company PLC, Meghna Petroleum Limited, Jamuna Oil Company and Standard Asiatic Oil Company—sought to raise their distribution margin from the current 55 paisa per litre. Padma Oil proposed increasing it to Tk 1.20, while BERC’s technical committee recommended 85 paisa.
During cross-examination, the companies admitted they had remained consistently profitable, paying dividends of up to 180 per cent in the last financial year and distributing sizeable staff bonuses. They said these payments were funded from non-operational income rather than furnace oil sales.