Bangladesh raises fuel prices by up to 17%

DHAKA: Bangladesh has increased fuel prices by up to 17.4%, compounding difficulties for consumers and businesses grappling with power and gas shortages, as the government seeks to offset losses from soaring global oil prices and elevated shipping costs due to conflict in the Middle East. The new rates, set to take effect from Monday, are anticipated to elevate transportation and production expenses across the oil-import reliant economy, exacerbating inflationary pressures at a time when sectors such as Bangladesh's prominent garment export industry are already facing a critical energy shortage.

The Energy Ministry reported that international fuel costs have more than doubled since March 2026, while freight charges have risen substantially owing to regional instability. With the new rates, diesel prices have climbed 17.4% to 135 taka per litre from 115 taka, while octane gasoline prices have risen to 165 taka per litre from 145 taka, petrol has increased to 160 taka from 140 taka, and kerosene has gone up to 155 taka from 135 taka.

Fuel prices could potentially reach Rs1,000 per litre in the event of a shortage, according to the petroleum minister. This is the third price hike this year, following increases in April and June, which were implemented to alleviate mounting import costs driven by higher global oil prices. The ministry stated that state-owned Bangladesh Petroleum Corporation incurred losses of 228.76 billion taka ($1.9 billion) between March and August, and the latest price increase could reduce annual losses by roughly 100 billion taka, simultaneously conserving foreign exchange reserves and curbing fuel smuggling to neighboring nations where prices are higher.

Additionally, the ministry highlighted significant subsidies for liquefied natural gas, explaining that the government has maintained support for electricity and gas supplies despite heightened import costs resulting from the regional energy crisis.