India's export duty on diesel unlikely to impact Bangladesh

Bangladesh has said India's decision to impose export duties on diesel is unlikely to cause any additional financial burden, given the nature of the deal signed under a government-to-government (G2G) agreement.

Officials at the Energy Division said that under the G2G arrangement both parties are obliged to honour the previously agreed terms and conditions. They noted that the agreement includes sovereign guarantees and cannot be changed unilaterally.

India recently imposed export duties of up to Rs21.5 per litre on diesel and Rs29.5 per litre on aviation turbine fuel (ATF), a move aimed at ensuring adequate domestic supply.

The development was disclosed by India's External Affairs Minister S Jaishankar in a post on X today (27 March).

Despite the new duties, Bangladeshi officials said the bilateral fuel supply arrangement remains unaffected.

"Bangladesh is supposed to receive diesel under the previously agreed supply terms. I think the decision to impose export duty will not harm us, as the terms and conditions of the sale and purchase were determined earlier," said Monir Hossain Chowdhury, joint secretary (operations) at the Energy Division, in a conversation with The Business Standard yesterday.

He also said that until any new terms are agreed, Bangladesh will continue to receive fuel in line with the existing agreement.

Under the long-term deal between Bangladesh Petroleum Corporation (BPC) and Numaligarh Refinery Limited, India is committed to supplying up to 180,000 tonnes of diesel through the India-Bangladesh Friendship Pipeline for the first six months of the 2026 calendar year (January–June).

Of this volume, around 120,000 tonnes have already been confirmed, according to officials. Bangladesh imports an average of 15,000 to 20,000 tonnes of diesel every month.

Amid an ongoing fuel supply strain, Bangladesh has also requested India to deliver an additional 60,000 tonnes within the existing contractual ceiling of 180,000 tonnes.