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Bangladesh is facing mounting pressure on its energy sector as volatility in global fuel prices has triggered severe financial losses, disrupted electricity generation and affected industrial production across the country.
The ongoing energy crisis has become a major challenge for the government, with shortages of fuel and gas forcing many mills and factories to suspend or reduce operations. The crisis has also put additional pressure on the government’s popularity as businesses and consumers continue to struggle with unstable energy supplies.
The Bangladesh Petroleum Corporation (BPC) has suffered significant losses by purchasing fuel oil at higher prices in the international market and selling it at comparatively lower prices in the domestic market. During the six months through August, the state-run corporation incurred losses of more than Tk22,000 crore, according to the information cited in the report.
Petrobangla has also faced a substantial financial burden over liquefied natural gas (LNG) imports. The state-owned energy corporation spent an additional Tk14,900 crore beyond its allocated subsidy during the past six months as it imported LNG at high international prices but supplied it to domestic consumers at lower prices.
The volatility in global energy markets has been exacerbated by the conflict situation in the Middle East, which has disrupted energy markets and increased uncertainty over fuel supplies and prices. Bangladesh, which relies heavily on imported fuel and LNG, has consequently been exposed to the impact of global price fluctuations.
Against this backdrop, the government is moving to reform the country’s fuel oil market by reducing the Bangladesh Petroleum Corporation’s long-standing monopoly and allowing greater private-sector participation.
As part of the proposed reform, the government plans to partially open the fuel oil market to private companies alongside the BPC. Necessary policies and regulations are reportedly being formulated to facilitate private-sector participation in the import, supply and distribution of fuel oil.
The move is being viewed as a significant shift in Bangladesh’s energy-sector policy. By bringing private companies into the market, the government hopes to diversify fuel supplies, improve market efficiency and maintain a more stable energy supply during periods of international market volatility.
The country’s current energy crisis has placed considerable pressure on public finances, with both the BPC and Petrobangla facing large financial losses. Against this backdrop, opening the fuel market to private-sector participation is emerging as one of the government’s key measures to address the crisis and reduce the financial burden on state-owned energy agencies.
If implemented effectively, the reform could help strengthen fuel security, improve supply management and reduce the government’s exposure to future shocks in the volatile global energy market.
https://thedailyexpress.news/news/business/1f1ac297-ccc3-63b0-8eb0-493effc6b4b9