Bangladesh raises fuel prices up to 17% as state oil firm losses mount
Bangladesh raised retail fuel prices by as much as 17.4% effective Monday, the third increase this year, as the government moves to curb mounting losses at the state-owned Bangladesh Petroleum Corporation (BPC) amid…
Source: The Edge Malaysia · nst.com.my · Reuters · NST Online · September 21, 2026 at 4:27 AM · AI-assisted report
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DHAKA, 21 SEPTEMBER 2026 —
Bangladesh raised retail fuel prices by as much as 17.4% effective Monday, the third increase this year, as the government moves to curb mounting losses at the state-owned Bangladesh Petroleum Corporation (BPC) amid surging global oil prices and higher shipping costs linked to the Middle East conflict.
Market Impact
The Energy Ministry said international fuel prices had more than than doubled since March 2026, while freight charges had risen significantly because of regional instability. The latest adjustment follows hikes in April and June that were also aimed at offsetting rising import costs.
Under the new rates, diesel rose 17.4% to 135 taka per litre from 115 taka. Octane gasoline increased to 165 taka from 145 taka, petrol to 160 taka from 140 taka, and kerosene to 155 taka from 135 taka. The ministry said the higher prices could cut BPC's annual losses by about 100 billion taka, while conserving foreign exchange reserves and curbing fuel smuggling to neighbouring countries where prices are higher.
BPC incurred losses of 228.76 billion taka (US$1.9 billion) between March and August, the ministry said. The corporation has been selling fuel below import cost for months, a gap that widened as global crude rallied and shipping routes around the Red Sea lengthened voyages and raised freight rates.
The increases will raise transportation and production costs across the import-dependent economy, adding to inflationary pressures at a time when industries, including the key garment export sector, are already grappling with an acute energy crunch. Garment manufacturers have reported frequent power and gas outages that disrupt production schedules and raise per-unit costs.
The ministry also cited substantial subsidies for liquefied natural gas, saying the government had continued to support electricity and gas supplies despite higher import costs stemming from the regional energy crisis. Bangladesh relies on imported LNG for a significant share of its power generation, and the government has absorbed the difference between contracted prices and domestic tariffs.
Economists said the fuel hike would feed into consumer prices within weeks, particularly for food and essential goods transported by road. The central bank has already flagged upside risks to inflation from supply-side pressures, and the latest adjustment may complicate monetary policy decisions in the coming quarters.
Related: Bangladesh Petroleum Corporation (BPC) · Energy Ministry · Dhaka