Bangladesh is at risk of becoming the first country in the world to face severe fuel shortages due to the ongoing conflict between Iran and the United States, local and international experts have warned.
The country’s dependence on imported fuel has put millions of Bangladeshis in a precarious situation.
Since late February, the strategic Strait of Hormuz has been effectively closed to most shipping, disrupting global oil supply and driving up prices. Around 90 per cent of Asia’s imported crude oil passes through this route. Bangladesh, with a population of over 17.5 crore, relies on imports for nearly 95 per cent of its fuel demand.
The government has introduced vehicle fuel rationing and restrictions on diesel sales amid the disruption. Motorists are spending hours hoping to get small amounts of fuel, while some filling stations have shut gates with bamboo barricades due to shortages. Outside Dhaka, small quantities of fuel are being sold in plastic bottles at inflated prices.
To tackle the crisis, the BNP-led government under Prime Minister Tarique Rahman is seeking to diversify fuel imports. The country is sourcing supplies from Singapore, Malaysia, Nigeria, Azerbaijan, Kazakhstan, Angola and Australia, and has applied to the United States for a waiver to import 6 lakh metric tonnes of diesel from Russia.
The government is also buying liquefied natural gas (LNG) at high spot-market prices to maintain domestic gas supply. State-owned Bangladesh Petroleum Corporation (BPC) is currently procuring around 60,000 metric tonnes of diesel from three private traders, with another 90,000 metric tonnes expected later this month.
Experts, including Shafiqul Alam of the Institute for Energy Economics and Financial Analysis, have warned that Bangladesh could be the worst-affected Asian country due to its heavy reliance on imported fossil fuels. Past experiences during the Russia-Ukraine war in 2022 have shown that panic buying can worsen the crisis.
Despite the warnings, Energy Minister Iqbal Hasan Mahmud Tuku assured the public that there is no immediate shortage of fuel in Bangladesh. However, officials continue to monitor stock levels carefully, with diesel reserves at around 1,15,473 tonnes (covering nine days of demand) and octane at 28,152 tonnes (two weeks’ demand) as of 4 March.
The government has also instructed public offices to switch off lights and air conditioning to conserve energy. Meanwhile, Bangladesh is seeking more than $2.5 billion in foreign financing to secure additional fuel imports and ease the pressure on domestic reserves.
