Fuel oil imports fall 85,500 tonnes in first quarter this year

Infographics: TBS

Bangladesh's fuel oil imports fell by about 85,500 tonnes in three months to March this year compared to the same period last year as half of the 17 ships carrying fuels for March delivery could not reach the country due to the Middle East war, official data shows.

As a result, despite government claims that there is no fuel crisis in the country, the situation at filling stations tells a different story. An unofficial rationing appears to be in place, with petrol pump owners saying they are receiving less fuel than required.

Ehsanur Rahman Chowdhury, president of the Chattogram division of the Bangladesh Petroleum Dealers, Distributors, Agents and Petrol Pump Owners Association, told TBS, "What the government says is one thing, but depots are supplying less fuel than demand. There is also panic among people – they are buying more fuel than needed. All of this combined has created the crisis."

In March last year, Bangladesh imported a total of 3.31 lakh tonnes of fuel. This March, imports dropped sharply to almost a half--1.69 lakh tonnes so far. Though another 80,000 tonnes are expected within this month, the March import will still be much lower  year-on-year, according to data from the Bangladesh Petroleum Corporation (BPC).

In the first three months of the current year, total imports of diesel and crude oil stood at 7.69 lakh tonnes. During the same period last year, imports were about 8.55 lakh tonnes. 

Diesel and crude oil imports in January this year were more than 2.86 lakh tonnes, up from 1.71 lakh tonnes in the same month last year. But February imports declined to 3.13 lakh tonnes from 3.52 lakh tonnes in the year-ago period. 

However, BPC General Manager (Commercial and Operations) Muhammad Morshed Hossain Azad said, "There is no shortage. People are anxious, they think prices will rise and fuel will become unavailable. In reality, neither will happen."

He said fuel supply was being maintained based on last year's demand trends.

BPC officials said Bangladesh imports between 65 lakh and 68 lakh tonnes of fuel annually, mainly diesel and crude oil. Of this, around 15 lakh tonnes of crude oil come from Middle Eastern countries and are refined at the Eastern Refinery. In addition, Bangladesh imports about 45 lakh tonnes of refined fuel annually from India and China. Petrol is fully produced domestically, and a large portion of octane is also produced locally.

How long will fuel reserves last?

According to BPC sources, diesel is the primary fuel for irrigation, road transport, and power generation in the country, making it the most in-demand fuel. In the 2024-25 fiscal year, annual diesel demand was 43.5 lakh tonnes – equivalent to 3,60,000 tonnes per month and an average of 12,000 tonnes per day.

The country's total diesel storage capacity is 6,24,189 tonnes. As of 23 March, available stock stood at 1,85,000 tonnes – about 29% of total capacity. This means the country currently has around 14 days of diesel reserves.

For octane, demand in FY2024-25 was 4,15,000 tonnes, of which nearly 2,00,000 tonnes were produced domestically and the rest imported. Total storage capacity for octane is 53,616 tonnes, with around 11,000 tonnes in stock as of 23 March – enough for about nine days.

The demand for petrol was 6,62,000 tonnes in FY2024-25. Total storage capacity is 37,013 tonnes, with 16,605 tonnes in stock as of 23 March, sufficient for about 11 days.

Additionally, furnace oil reserves stand at 70,833 tonnes, enough for about 29 days. Jet fuel reserves are 34,877 tonnes (about 23 days), kerosene reserves are 8,571 tonnes (about 46 days), and marine fuel reserves are around 1,500 tonnes (about 44 days).

Meanwhile, as of 23 March, about 80,000 tonnes of crude oil were stored at the Eastern Refinery. With an average daily refining capacity of around 4,500 tonnes, this stock can support production for about 17 days. However, there is concern that production could be disrupted if new shipments do not arrive on time.

Import plans

Under prior plans, 17 ships carrying diesel and furnace oil were scheduled to arrive this month. However, due to the war situation, only eight vessels have reached the country so far, delivering around 2 lakh tonnes of fuel. Three more ships may arrive this month, but uncertainty remains over the remaining six.

To reduce the shortfall, 10,000 tonnes of fuel have been imported via pipeline from India, with another 5,000 tonnes expected this month.

Additionally, a shipment of 1 lakh tonnes of crude oil has been stuck at Saudi Arabia's Ras Tanura terminal since 3 March, and the contract for that vessel has been cancelled. As a result, no new crude shipments are arriving this month. As an alternative, BPC has secured a deal to import 1 lakh tonnes of crude oil from Yanbu port in Saudi Arabia next month, albeit at a higher cost.

In this situation, BPC has prepared a preliminary import schedule for April and May. In April, the plan includes importing 3 lakh tonnes of diesel, 50,000 tonnes of jet fuel, 25,000 tonnes of octane, and 50,000 tonnes of furnace oil via 14 ships and three pipeline consignments. However, confirmed supply so far includes only 1,10,000 tonnes of diesel and 20,000 tonnes via pipeline.

For May, 17 ships are scheduled to bring in around 3,50,000 tonnes of diesel and other fuels, but suppliers have yet to confirm these deliveries.

BPC General Manager (Finance) Md Jahangir Kabir told TBS that there is no shortage of diesel, though delays in two crude oil shipments created a temporary issue. "Alternative arrangements have been made, and we are contacting several new suppliers. We have secured assurances for next month's supply," he said.