Fuel prices jump 20 taka a litre as energy crunch returns
The government has raised the prices of all four major petroleum products by 20 taka a litre, delivering another sharp increase in fuel costs months after Bangladesh was hit by shortages and long queues at filling stations.
From Monday, diesel will cost 135 taka a litre, up from 115 taka, while kerosene will rise to 155 taka from 135 taka. Petrol will cost 160 taka, up from 140 taka, and octane 165 taka, from 145 taka.
The new rates were announced in a gazette issued by the Energy and Mineral Resources Division on Sunday and take effect on September 21.
The increase comes less than three weeks after the government decided to keep September prices unchanged at the levels that had been in place since June.
It is also the largest across-the-board increase since the BNP government took office earlier this year.
The latest adjustment raises diesel by 17.4%, petrol by 14.3%, octane by 13.8% and kerosene by 14.8% in a single move.
Diesel, the most widely used petroleum product in Bangladesh, has particular significance for inflation because it powers buses and trucks as well as irrigation pumps and industrial machinery.
A previous diesel price increase in April was followed by higher freight charges, with truck fares on the Dhaka-Chattogram route rising by 7,000-10,000 taka per trip, according to transport operators.
Third increase under BNP government
Sunday's decision marks the third upward fuel-price adjustment since the BNP government took office.
The first major increase came on April 19, during a severe disruption in international energy supplies. Diesel jumped by 15 taka to 115 taka a litre, octane by 20 taka to 140 taka, petrol by 19 taka to 135 taka and kerosene by 18 taka to 130 taka.
Those increases pushed domestic fuel prices to record levels at the time.
A second adjustment followed on June 1. Petrol, octane and kerosene each rose by another 5 taka a litre, taking them to 140 taka, 145 taka and 135 taka respectively. Diesel remained unchanged at 115 taka.
Prices were then held at those levels through July, August and the first 20 days of September.
The latest 20 taka increase means diesel has climbed from 100 taka to 135 taka a litre since April, a rise of 35%. Petrol has risen from 116 taka to 160 taka, or nearly 38%; octane from 120 taka to 165 taka, or 37.5%; and kerosene from 112 taka to 155 taka, or about 38%.
From pump queues to another energy squeeze
The price increases come against the backdrop of two major bouts of energy disruption under the BNP government.
Bangladesh faced a severe fuel shortage in March and April after the conflict involving the US, Israel and Iran disrupted supplies through the Strait of Hormuz.
Long queues formed at filling stations across Dhaka and other parts of the country, with some pumps running out of petrol and octane. The government initially imposed limits on fuel purchases before lifting rationing in mid-March, but shortages and queues persisted into April.
By mid-April, the Energy Division said Bangladesh had about 101,385 tonnes of diesel in stock, enough for only eight to nine days of demand. Petrol stocks were sufficient for roughly 12-13 days, although octane stocks could cover about 27 days.
The government blamed disruption to imports through the Strait of Hormuz, panic buying and hoarding for worsening the shortage. Authorities said they recovered about 542,000 litres of hoarded fuel and filed 3,510 cases between March 3 and April 14.
The crisis prompted the government to turn to alternative suppliers and approve unusually large purchases of refined petroleum products. In April, Bangladesh moved to procure 17 lakh tonnes of refined fuel, including 16 lakh tonnes of diesel, from suppliers outside its traditional supply channels.
Energy pressures have intensified again in September as continuing disruption around the Strait of Hormuz and renewed risks to Red Sea shipping raise the cost and difficulty of securing oil and gas supplies.
The government this week approved refined-fuel imports worth about 12,537 crore taka for the remaining three and a half months of the year and waived normal tender requirements for additional purchases amid the supply crunch.
Reuters reported this week that disruption to Middle Eastern energy exports has also pushed Asian spot LNG prices back towards $30 per million British thermal units, contributing to gas shortages, power cuts and disruption to factories in Bangladesh.
Bangladesh has used an automatic fuel-pricing mechanism since 2024, under which domestic prices are reviewed in response to international petroleum prices, import costs, exchange rates, taxes and distribution costs.
Sunday's gazette says the new retail prices were set after revising the rates fixed on May 31 and will remain in force until further notice.