BPC, Petrobangla rack up Tk34,000cr in unpaid fuel imports duty, hurting customs revenue target

While private importers must clear all customs duties before goods are released from port, two of the government's largest energy importers – Bangladesh Petroleum Corporation (BPC) and Petrobangla – have been lifting fuel consignments without paying upfront, leaving more than Tk34,000 crore in unpaid duties and taxes, according to customs officials.

Infographics: TBS

The practice, they said, has severely hurt revenue collection at Chattogram Custom House, which handles most of the country's petroleum and liquefied natural gas (LNG) imports and relies heavily on payments from the two state-owned entities to meet its targets.

The biggest exposure is Petrobangla's LNG imports.

In an official letter dated 8 January, Chattogram Custom House demanded Tk22,048.62 crore in unpaid duties and taxes from Petrobangla for the period from 2021 to December 2025, alleging that LNG cargoes had been released without lawful assessment or payment.

According to the letter, obtained by The Business Standard, Petrobangla imported LNG under 408 bills of entry up to 30 November 2025. Duties amounting to Tk1,610.54 crore were paid against only 38 bills, while the remaining 370 consignments were cleared without payment.

The customs authority said this violated Sections 83, 84 and 90 of the Customs Act, 2023, which require importers to submit bills of entry, complete assessments and pay all applicable duties and taxes before goods are released.

"Petrobangla has been releasing LNG consignments by submitting bills of entry without paying duties or taxes, which is clearly contrary to the law," said Tafsir Uddin Bhuiyan, additional commissioner of Chattogram Custom House.

BPC's Tk12,347 crore exposure

BPC and its subsidiaries including Padma Oil Company, Meghna Petroleum, Jamuna Oil Company, Eastern Refinery and Standard Asiatic, have also built up large unpaid customs liabilities.

Between July 2020 and June 2025, these entities imported goods under 7,190 bills of entry, creating potential unpaid duties and taxes of Tk12,347 crore, customs officials said.

Show-cause and demand notices were issued for 695 bills, claiming Tk3,430.32 crore. BPC later paid Tk700 crore, but as of 29 October 2025, final demand notices were still outstanding on 578 bills amounting to Tk2,730.32 crore.

'Unequal system'

Customs officials said repeated reminders have failed to secure timely payments, forcing the authorities to issue final demand notices.

They said government-owned importers enjoy operational privileges that private firms do not, allowing them to clear goods without immediate duty payment.

"Private importers cannot release goods without paying duties. But state-owned entities do, and that gap is one reason we struggle to meet revenue targets," Tafsir Uddin said.

With Chattogram handling most fuel imports, any delay by BPC and Petrobangla directly hits national revenue performance, he added.

Energy expert Prof M Tamim said the two companies collect duties and taxes from consumers but fail to pass them on to the government.

"Releasing imports without paying duties is a clear irregularity," he said, urging the National Board of Revenue to intervene.

Why delay in payments

Petrobangla Director (Finance) Mizanur Rahman said LNG imports were previously subject to double taxation, with a 15% VAT at the import stage and another 15% during distribution.

"The government withdrew the 15% import-stage VAT in June 2025, leaving only a 2% advance income tax (AIT) and no customs duty on LNG imports," he told The Business Standard. 

"We are now paying the AIT regularly. Most of the Tk22,048 crore dues relate to the period before June 2025."

A senior Petrobangla official said chronic delays in government subsidy payments were the main reason the company could not clear its tax liabilities.

"We sell gas at a subsidised rate of around Tk2 per unit. The government is supposed to reimburse that subsidy, but Finance Division delays have left us short of cash," the official said.

The situation worsened as the taka weakened and global LNG prices surged, sharply raising import bills, he added.

Petrobangla Chairman Mohammad Reznur Rahman said, "We are working with the NBR and the Finance Division. Some arrears have already been paid, and once the subsidy is disbursed, we will settle the remaining dues."

BPC's chairman and directors did not respond to calls for comment. However, a BPC official said the corporation's companies regularly pay their dues and that payments are withheld only when disputes arise over customs claims.

Duties waived in budget

Petrobangla Director (Finance) Mizanur Rahman said LNG imports were previously subject to double taxation, with a 15% VAT at the import stage and another 15% during distribution.

"The government withdrew the 15% import-stage VAT in June 2025, leaving only a 2% advance income tax (AIT) and no customs duty on LNG imports," he told The Business Standard.

"We are now paying the AIT regularly," he added, noting that the Tk22,048.62 crore in dues had accumulated before June 2025.

The FY2025–26 budget withdrew import duties on several fuels, including diesel and natural gas, while granting concessions on CNG, NPG and LNG imports.

The import duty on natural gas was cut from 100% to zero, while duties on crude and partially refined petroleum, fuel oils, gas oil and other heavy oils were fully waived.

For CNG, NPG and LNG, the import duty was reduced from 10% to 5%.

The budget also proposed lowering the import duty on crude oil and oil derived from bituminous minerals from 5% to 1%.

For aviation fuels – including jet fuel, kerosene, naphtha, motor and aviation spirits, and white spirit – the duty was proposed to fall from 10% to 3%, with the same rate applied to light diesel and high-speed diesel.