Energy Minister Says Fuel Supply Back to Normal
Energy Minister says fuel supply returning to normal after procurement disruptions; prices may be cut if global conditions improve.
At a glance
- Energy Minister Iqbal Hassan Mahmood said fuel is now arriving properly and supply schedules have been fixed.
- He linked recent procurement difficulties to disruptions in Middle Eastern supply and the July fire at Excelerate Energy’s floating LNG terminal in Moheshkhali, Cox’s Bazar.
- The government has secured alternative sources and approved an additional 695,000 tonnes of fuel imports for September to December.
- The September 21 price increase raised diesel from Tk115 to Tk135 a litre after months of higher import and shipping costs.
Context
The Middle East conflict disrupted Bangladesh’s usual fuel procurement routes and pushed up the cost of bringing fuel into the country. Separately, a July fire at Excelerate Energy’s floating LNG terminal in Moheshkhali disrupted gas supply, adding to wider energy pressures. Between March and August, BPC spent an additional Tk23,000 crore on fuel imports between March and August as freight charges rose as much as four to five times.
The recent fuel price hike on September 21 is linked to the rise in import costs. At a September 22 briefing, Information and Broadcasting Adviser Dr Zahed Ur Rahman said the TK 20 increase was expected to cover around TK 10, 000 crore of BPC’s annual losses.
Why It Matters
The supply situation now appears more stable, with the government saying shipments are arriving and schedules have been fixed. BPC also said on September 22 that existing stocks were sufficient and that it expected no shortage until December.
That makes the price question more relevant if supply conditions continue to improve. State Minister Aninda Islam Amit said on September 24 that the government would reduce fuel prices if the Middle East crisis eases and international oil prices fall.
What We Think
The government's claim of restored supply is useful, but supply availability and fuel costs are different measures of recovery. If supply remains stable and import conditions improve, commuters and households will have a reasonable basis to expect that change to be reflected in domestic fuel prices.
