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The government has taken an initiative to formulate a draft policy to allow private-sector companies to import, store, transport, distribute and market refined petroleum products in an effort to ensure uninterrupted and secure fuel supplies across Bangladesh.
The Ministry of Power, Energy and Mineral Resources is currently reviewing the draft of the ‘Policy on Import, Storage, Transportation, Distribution and Marketing of Refined Fuel by the Private Sector, 2026’.
Energy experts have also stressed the need to allow private companies to import petroleum products alongside the government to meet the country’s growing demand and create a more competitive fuel market.
Power and Energy Minister Iqbal Hasan Mahmud Tuku said competition between the public and private sectors was common in many countries.
“Across the world, there is competition between the private and public sectors. In India, Indian Oil and Reliance sell fuel alongside each other. Reliance’s fuel is more expensive, while Indian Oil’s is cheaper. Consumers there have the option to choose which company’s fuel they want to buy,” he said.
“In Bangladesh, fuel prices are determined by the government, Bangladesh Petroleum Corporation (BPC) and the Ministry of Energy. Therefore, there is little scope for fuel prices to vary.”
He said India’s fuel security was relatively strong because both public and private companies operated in the sector.
“That is why we have decided to allow the private sector to import fuel. A policy is being formulated for this purpose. The policy will be open to everyone, and anyone with the required financial capacity will be able to import fuel by complying with the policy,” Tuku said.
He added that the proposal was currently under review.
“Once the policy is finalised, it will go to the Economic Affairs Committee for approval, followed by the Purchase Committee and then the Cabinet. If it receives Cabinet approval, the policy will be formally announced. However, some people are making speculative comments without understanding the process,” he said.
According to the Energy Division, the policy is being formulated to strengthen the country’s energy security, maintain uninterrupted fuel supplies, establish a transparent and competitive system and utilise private-sector infrastructure and investment alongside government facilities during emergencies and crises.
The policy will be finalised after taking into account opinions and recommendations from stakeholders in the energy sector, the division said.
State-owned Bangladesh Petroleum Corporation currently has a virtual monopoly over the import and marketing of petroleum products in the country.
However, the government is now considering bringing private-sector companies into fuel import and marketing activities to meet the country’s huge demand for petroleum products and ensure uninterrupted supplies to industries and power plants.
Energy-sector stakeholders say it is increasingly difficult for the government or BPC alone to meet the country’s rapidly growing fuel demand. The situation has become more apparent amid disruptions and uncertainty caused by conflicts in the Middle East.
BPC has also faced allegations of corruption and inefficiency at various times. According to people familiar with the sector, the corporation’s system losses are above 20%.
They believe allowing private companies to import fuel could introduce greater competition into the market and ultimately benefit the wider economy.
Energy-sector experts say Bangladesh’s only major petroleum refinery, Eastern Refinery, is ageing and that sufficient initiatives have not been taken to significantly expand its refining capacity.
As a result, more than 75% of the country’s total demand for refined petroleum products has to be met through imports, often at relatively high prices, they said.
Neighbouring India, by contrast, imports crude oil at competitive prices, refines it domestically and meets a substantial portion of its domestic demand while also exporting refined petroleum products.
Experts believe encouraging major private investors to establish refineries in Bangladesh could be a significant positive development for the energy sector.
They say the government could facilitate such investment by providing land and other logistical support. A public-private partnership (PPP) model could also be considered where appropriate.
Experts, however, believe private companies should be allowed to import petroleum products only after meeting clearly defined regulatory requirements.
The authorities should assess whether applicant companies have their own jetties or vessels, adequate facilities for unloading and storing petroleum products, established distribution networks and sufficient capital to conduct large-scale fuel import and marketing operations.
Energy expert Professor M Tamim said effective regulation would be the key to introducing competition into fuel import and marketing.
“Regulation is the most important issue in fuel import and marketing. If we want competition in this sector, it must be based on an open-market system. There has to be a competitive component,” he said.
He added that private companies should be required to meet certain conditions before being allowed to import fuel.
“In India, there is Bharat Petroleum as well as Reliance petrol stations. India is a huge country, and it also has policies governing this sector,” Tamim said.
Economist Abu Ahmed said Bangladesh could no longer afford to rely on outdated economic structures as the country’s economy continued to expand.
“As Bangladesh’s economy grows, there is no scope for clinging to old structures. The time has come for the energy sector to move away from excessive dependence on the state monopoly and towards public-private partnerships and a competitive market,” he said.
He said private investment was essential for building an efficient economy.
“To attract investment, the private sector must be given opportunities. At the same time, to ensure that such investment remains secure and serves the public interest, the government must act as a strong regulator,” Abu Ahmed said.
A combination of private investment, public-sector participation and effective regulation, he added, could become one of the foundations of Bangladesh’s future energy security and economic growth.
