The Bangladesh Petroleum Corporation (BPC) is struggling to secure critical shipments of crude and refined oils as escalating conflict in the Persian Gulf disrupts traditional supply routes from the Arabian Peninsula. Energy Division officials warn that the volatility in the region is jeopardizing the state-owned entity’s ability to maintain its fuel procurement targets, threatening the stability of the nation’s energy supply.
The Bangladesh fuel import crisis has emerged as a direct consequence of heightened tensions in the Persian Gulf, which have severely impacted the BPC’s six-month procurement strategy. Approved on January 6, 2025, the plan aimed to import approximately 30 lakh tonnes of refined and crude oils by June to ensure national energy security. However, the disruption of maritime traffic through the Strait of Hormuz—a critical chokepoint through which roughly 20% of the world’s total oil consumption passes—has left the BPC scrambling for alternative sources.
Of the planned 30 lakh tonnes, half was designated as crude oil from Saudi Arabia and the United Arab Emirates for the state-run Eastern Refinery Limited (ERL). The remaining 15 lakh tonnes of refined fuel were to be sourced from a network of companies across India, China, Malaysia, the UAE, Thailand, and Indonesia. While some shipments remain steady, the Gulf-based supply chain has largely frozen.
The Hormuz Chokepoint and Supply Disruptions
The crisis was precipitated by a series of military escalations beginning February 28, involving joint strikes by the United States and Israel on Iran, followed by retaliatory actions from Tehran targeting interests in the UAE, Kuwait, Oman, Qatar, Iraq, and Saudi Arabia. These events have not only introduced extreme uncertainty into the global energy trade but also drove petroleum product prices up by approximately 50% in March.
The impact on Bangladesh has been immediate. Since January, when the ERL received a consignment of one lakh tonnes of crude from Saudi Arabia, no further crude vessels from the Gulf have reached the Chittagong port. Energy Division officials noted that a Saudi shipment of one lakh tonnes was obstructed at the Strait on March 25. efforts are now underway to reroute that consignment through the Red Sea, with an expected arrival date of April 20.
To prevent a total suspension of refining at the ERL, the government is now pursuing emergency imports of one lakh tonnes of crude from Malaysia. Meanwhile, the geopolitical deadlock has left approximately 2,000 ships stranded across various seas, including six Bangladeshi vessels—two carrying fuel oils and four carrying liquefied natural gas (LNG)—currently stuck in the Strait of Hormuz. Tehran has recently provided assurances to Dhaka that these vessels will be allowed to pass.
Analyzing the Stockpile Gap
Despite the logistical hurdles, government officials have attempted to project a sense of stability. Monir Hossain Chowdhury, a joint secretary at the Energy Division, reported in a recent briefing that the country holds a total fuel stock of 255,018 tonnes, supplemented by an emergency reserve of 80,000 tonnes.
However, a closer look at the numbers reveals a precarious balance. The combined total of current stocks and fuel currently in the pipeline stands at approximately four lakh tonnes. This falls short of the average monthly consumption of 5.1 lakh tonnes recorded during the 2024-25 financial year, leaving a deficit of roughly one lakh tonnes per month.
| Fuel Type | Stock Volume |
|---|---|
| Diesel | 122,660 |
| Furnace Oil | 58,736 |
| Jet Fuel | 41,876 |
| Petrol | 12,194 |
| Kerosene | 9,378 |
| Octane | 9,021 |
| Marine Fuel | 1,153 |
This supply-demand gap has already manifested at the consumer level, with reports of long queues at filling stations, fuel rationing, and occasional altercations among motorists. While Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood has dismissed claims of a shortage, attributing the queues to a spike in demand, the BPC continues to work on diversifying its procurement.
Diversification and Alternative Sourcing
To mitigate the risks associated with the Persian Gulf, the government has scaled up efforts to import petroleum from non-traditional sources. The BPC is now exploring partnerships with suppliers in Nigeria, Angola, Brunei, Australia, Russia, and Kazakhstan.
On March 31, the government approved three separate proposals to procure 2.6 lakh tonnes of diesel. This emergency procurement includes:
- Exxon Mobil Kazakhstan INC: 1 lakh tonnes of diesel.
- Abeer Trade and Global Markets: 1 lakh tonnes of diesel.
- PT Bumi Sial Pusako Zapin (BSP Zapin) of Indonesia: 60,000 tonnes of diesel.
While these contracts are finalized, officials admit these supplies are unlikely to arrive within the current month. In the interim, diesel imports from India—under an annual arrangement for 1.8 lakh tonnes plus an additional 50,000 tonnes—have remained uninterrupted, providing a vital lifeline for the transport sector.
The Economic Weight of Petroleum
The urgency of the situation is underscored by the sheer volume of fuel the country requires to function. According to the BPC annual report for the 2024-2025 financial year, total petroleum imports reached 62.15 lakh tonnes, costing approximately Tk 50,195.14 crore (roughly $4.1 billion).
Diesel remains the backbone of the economy, accounting for 62.69% of total consumption. The transport sector is the largest consumer, utilizing 63.41% of all imported petroleum, followed by agriculture at 15.41% and the power sector at 11.67%. The rising demand for octane, driven largely by government and corporate vehicle use, has also forced the BPC to increase imports, as the ERL can only supply about 50% of the annual 4-lakh-tonne octane requirement.
The BPC is currently expecting at least 15 vessels to dock at Chittagong port this month. This includes a tanker from Malaysia with 27,300 tonnes of diesel, which began unloading earlier this week, and upcoming shipments from Singapore and other regional hubs.
The next critical milestone for the Energy Division will be the attempted arrival of the diverted Saudi crude shipment through the Red Sea by April 20, which will determine if the Eastern Refinery Limited can maintain full operations without relying entirely on emergency Malaysian crude.
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