Oil distributors propose fuel price hike to curb panic buying
The proposal was made during a high-level meeting on Thursday (5 March) attended by all state-run energy entities involved in fuel marketing, according to officials familiar with the discussion.
State-owned oil marketing companies have proposed raising fuel prices to discourage panic buying as Bangladesh grapples with growing uncertainty over energy supplies amid escalating tensions in the Middle East.
The proposal was made during a high-level meeting on Thursday (5 March) attended by all state-run energy entities involved in fuel marketing, according to officials familiar with the discussion.
Managing directors of Padma Oil Company Limited, Jamuna Oil Company Limited and Meghna Petroleum Limited jointly recommended a price hike, arguing that higher prices could deter consumers and businesses from stockpiling fuel.
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The meeting was chaired by Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmud and attended by the state minister and senior officials of the Energy and Mineral Resources Division.
A source at the Energy Division told The Business Standard that the minister rejected the proposal for now.
"Better try to bring discipline in fuel sales first. If that does not work, a decision can be taken later," the minister told officials during the meeting, according to the source.
Officials said the distributors raised the proposal as panic buying has started to emerge in parts of the country following reports of declining fuel reserves and uncertainty over international supply routes.
Executives of the state-owned oil companies believe that a moderate price increase could discourage bulk purchases and stabilise market demand.
A senior official at Bangladesh Petroleum Corporation (BPC) said the government may eventually increase prices by Tk5–Tk10 per litre for diesel and other fuels if panic buying continues.
Another Energy Division official hinted that a decision on fuel price adjustments could come quickly if the situation worsens.
BPC said the corporation is already under heavy financial pressure as global fuel prices rise.
Officials said BPC is currently incurring a loss of around Tk74 per litre on diesel imports due to the sharp increase in international market prices.
Despite the mounting financial strain, meeting sources said the government remains determined to keep fuel supply flowing.
"The priority now is to keep the supply chain running and avoid disruptions in transport, agriculture and power generation," one official said.
Adding to the uncertainty, Bangladesh may also face supply risks from another direction.
Officials said China has recently imposed restrictions on some oil refineries exporting refined petroleum products such as diesel, octane, petrol, furnace oil and kerosene.
Bangladesh imports a significant portion of refined fuel from UNIPEC, the trading arm of Chinese state-owned energy giant Sinopec.
Officials at BPC fear that if export restrictions tighten, this supply window could also shrink — at a time when shipments from the Middle East are already under pressure following disruptions around the strategic shipping route of the Strait of Hormuz.
