BPC approves $1b fuel import plan for 2026, with $119m from India, $882m via other G2G deals

Highlights: 

• BPC clears purchases worth $119 million from India, further $882.33 million from other state-owned suppliers under G2G deals
• BPC to import 180,000 tonnes of low-sulphur diesel between Jan and Dec 2026 through India-Bangladesh Friendship Pipeline
• Under one contract, BPC will import 700,000 tonnes of Murban crude from Abu Dhabi National Oil Company in 2026
• Board also approves renewal of long-standing agreement with Saudi Aramco to import 800,000 tonnes of Arabian Light crude next year 

Bangladesh Petroleum Corporation has approved a major fuel import plan for 2026, clearing purchases worth about $119 million from India through the cross-border pipeline and a further $882.33 million from other state-owned suppliers under government-to-government agreements.

The approvals came at BPC's 1,014th board meeting on 10 December, chaired by Md Amin Ul Ahsan, secretary of the corporation.  

According to BPC officials, under a long-term agreement with India's Numaligarh Refinery Limited (NRL), BPC will import 180,000 tonnes of low-sulphur diesel between January and December 2026 through the India-Bangladesh Friendship Pipeline. 

The deal is part of a 15-year government-to-government contract signed in October 2017, which fixes the import premium at $5.50 per barrel.

Infograph: TBS

Based on the Platts reference price of 2 December 2025 and an exchange rate of Tk122.70 per dollar, the estimated cost of the pipeline diesel imports stands at $119.13 million, or about Tk1,461.76 crore, according to BPC officials.

They said the pipeline-based supply has become a strategic pillar for meeting diesel demand in northern Bangladesh, particularly during peak irrigation seasons when pressure on rail and road transport intensifies.

Alongside the imports from India, the board approved a proposal to import 1.38 million tonnes of refined petroleum products during the first half of 2026 from various countries under government-to-government arrangements. The six-month programme is estimated to cost $882.33 million, or around Tk10,823 crore at the same exchange rate.

The board also renewed term agreements for crude oil imports to supply Eastern Refinery Limited, the country's only state-owned refinery.

Under one contract, BPC will import 700,000 tonnes of Murban crude from Abu Dhabi National Oil Company in 2026, with 400,000 tonnes scheduled for January to June and the remaining 300,000 tonnes for July to December. Pricing will follow the official selling price published by ICE Futures Abu Dhabi, using the M-2 month reference.

At an average price of $84.29 per barrel, the Murban crude imports are estimated to cost $451.38 million, or around Tk5,543 crore, calculated at an exchange rate of Tk122.80 per dollar.

The board also approved renewal of the long-standing agreement with Saudi Aramco to import 800,000 tonnes of Arabian Light crude next year, split evenly between the two halves of 2026. Pricing will be based on the monthly average of Platts Dubai and GME Oman.

At an average rate of $87.53 per barrel, the cost of these imports is estimated at $514.68 million, or around Tk6,320 crore.

AKM Azadur Rahman, director (operations and planning) of BPC, confirmed the import plan to The Business Standard, saying the approved proposal has already been sent to the ministry for final clearance.

On imports from India, he said BPC has a five-year agreement under which diesel is supplied at a fixed premium. While the price is slightly higher than some alternatives, transportation costs are significantly lower as the fuel is delivered through the pipeline. "That makes the arrangement beneficial for both sides," he added.

Pipeline supply seen as cost-effective

BPC officials told the board that the India-Bangladesh Friendship Pipeline has delivered both cost and operational benefits since it was commissioned in March 2023. Before the pipeline became operational, diesel from Numaligarh Refinery was transported by rail between 2016 and early 2023.

The pipeline is 131.57 kilometres long, with about five kilometres in India and the remaining 126.57 kilometres in Bangladesh. Diesel is now delivered directly to the Parbatipur depot, reducing reliance on coastal depots and long-distance rail transport.

According to BPC estimates, transporting diesel from Chattogram to Parbatipur by sea and rail costs about $2.64 per barrel, in addition to the import premium. For January to June 2026, seaborne gasoil imports carry a premium of $5.33 per barrel, pushing total delivery costs to nearly $7.97 per barrel. 

By comparison, pipeline imports involve only the fixed $5.50 per barrel premium.

Officials also flagged chronic shortages of rail wagons, particularly during the boro irrigation season, when diesel demand spikes sharply in northern districts. Pipeline deliveries, they said, play a crucial role in preventing supply disruptions during those periods.

For 2026, BPC plans to import 180,000 tonnes of 0.005% sulphur diesel from NRL, with a tolerance of plus or minus 10%. 

Sixty thousand tonnes will be imported on a firm basis in each half of the year, with an additional 30,000 tonnes kept as optional volume for each period.

The volume was finalised after a virtual meeting on 2 December 2025 between BPC's premium negotiation committee and Numaligarh Refinery, where the Indian refiner agreed to supply the diesel under the existing pricing framework.

Actual invoice values will be calculated weekly, based on average Platts prices during the delivery period, combined with the fixed premium. Exchange rate movements and global price changes will determine the final cost.

Diesel dominates refined fuel imports

For the first half of 2026, diesel will again take the largest share of refined fuel imports, reflecting strong demand from transport, agriculture, irrigation and power generation.

Of the approved 1.38 million tonnes, BPC will import 890,000 tonnes of low-sulphur diesel, nearly two-thirds of the total volume. The programme also includes 185,000 tonnes of Jet A-1 fuel, 100,000 tonnes of 95-octane petrol, 175,000 tonnes of furnace oil and 30,000 tonnes of low-sulphur marine fuel.

Each product has been approved with a plus or minus 10% tolerance to allow flexibility in managing shipments and demand fluctuations.

Following negotiations in Singapore and Malaysia in late November, along with online discussions, seven state-owned suppliers were selected for the G2G imports. They are PetroChina and Unipec of China, ENOC of the UAE, Indian Oil Corporation, OQ Trading of Oman, PTLCL of Malaysia and BSP of Indonesia.

Officials said the negotiated premiums were significantly lower than in previous periods. Diesel premiums were fixed at $5.33 per barrel, down from $8.75 per barrel in the second half of 2024. Premiums were set at $6.50 per barrel for Jet A-1, $6.80 per barrel for octane, $53 per tonne for furnace oil and $79.50 per tonne for marine fuel.

Based on current reference prices, diesel imports alone are expected to cost about $587.9 million. Jet A-1, octane, furnace oil and marine fuel imports are estimated at $135.9 million, $73.8 million, $69.6 million and $15.1 million respectively.

Board members noted that rising freight and insurance costs, geopolitical tensions and supply-side controls by oil-producing countries continue to pose risks for fuel-importing economies like Bangladesh.

BPC said the import programme will be financed through a mix of budgetary allocations, revenue from fuel sales, government support if required and external financing facilities, including those from the International Islamic Trade Finance Corporation for crude oil imports.

All approved proposals will now be placed before the Cabinet Committee on Government Purchase for final approval, after which BPC will proceed with contract execution to ensure uninterrupted fuel supply throughout 2026.