Bangladesh raises fuel prices as Middle East conflict drives up costs

DHAKA, September 21 - Bangladesh has increased fuel prices by up to 17.4 percent, putting additional strain on customers and businesses as the government seeks to mitigate substantial losses from soaring global oil prices and elevated shipping costs due to the Middle East conflict. The new rates, set to take effect on Monday, are anticipated to elevate transportation and manufacturing expenses across an oil-import reliant economy, exacerbating inflationary pressures at a time when industries, particularly Bangladesh's vital garment export sector, are already facing a severe energy shortage.

Mohiuddin Rubel, the additional managing director of Denim Expert Ltd, which serves brands such as H&M, remarked, "Staying in business requires staying competitive - the company that can get its product to the shelf fastest and cheapest gains the advantage - and fuel, electricity, and fuel costs all contribute to that equation."

According to the Energy Ministry, international fuel prices have more than doubled since March 2026, while freight charges have significantly risen due to regional instability. Under the revised rates, diesel prices surged 17.4 percent to 135 taka ($1.11) per liter from 115 taka, unleaded gasoline prices climbed to 165 taka per liter from 145 taka, gasoline to 160 taka from 140 taka, and kerosene to 155 taka from 135 taka.

This price hike builds upon earlier increases in April and June when the government also raised prices to offset mounting import costs due to higher global oil prices. The ministry disclosed that Bangladesh Petroleum Corporation suffered losses of 228.76 billion taka ($1.9 billion) between March and August, and the latest price increase could reduce annual losses by approximately 100 billion taka while preserving foreign exchange reserves and curbing fuel smuggling to neighboring countries where prices are higher.

The ministry also highlighted significant subsidies for liquefied natural gas, stating that the government remains committed to supporting electricity and gas supplies despite higher import expenses resulting from the regional energy crisis. This decision has drawn criticism from exporters, who assert that higher fuel costs will further burden manufacturers already contending with energy shortages.

Anwar-ul Alam Chowdhury, president of the Bangladesh Chamber of Industries, warned that the fuel price hike will adversely impact everyone from ordinary citizens to businesses and industries by fueling inflation, raising production and transportation costs, inducing job losses, and compelling some enterprises to scale back operations.