Bangladesh’s energy sector is facing mounting financial pressure from the Middle East crisis, with the country’s additional energy expenditure reaching US$4.12 billion over the past eight months as global crude oil prices continue to rise.
Prime Minister’s Adviser on Finance and Planning Rashed Al Mahmud Titumir disclosed the additional expenditure last week, highlighting the growing cost of securing energy supplies amid escalating regional tensions.
The pressure is likely to intensify following a sharp rise in international oil prices, fuelled by fears that repeated attacks by Yemen-based Houthi militants on Saudi Arabia could disrupt energy supplies across West Asia.
Brent crude futures rose 3.1 per cent, or $3.55, to settle at $116.72 per barrel on Friday, their highest closing level since April 29. US West Texas Intermediate (WTI) crude climbed 3.8 per cent to close at $103.27 a barrel.
Both benchmarks gained 6.2 per cent over the week, marking their biggest weekly increase in two months.
The latest rally reflects growing concerns that the widening military conflict in West Asia could disrupt oil shipments and prevent supplies from reaching international markets.
Crude prices have climbed nearly 60 per cent since the United States and Israel launched joint strikes on Iran on February 28. Prices are now at their highest level since May and remain close to their peak since the war began.
BPC losses mount
The surge in global oil prices has compounded the financial strain on Bangladesh’s fuel sector, despite an increase in domestic fuel prices.
The government has raised fuel prices since April, with the latest increase reaching up to 17.4 per cent about a month ago.
However, recent Energy Division data show that the Bangladesh Petroleum Corporation (BPC) incurred losses of around Tk22,875.66 crore during the six months from March to August this year.
The losses averaged approximately Tk3,813 crore a month over the period.
According to the Energy Division’s projection, potential annual losses across all petroleum fuels could reach around Tk50,000 crore if the pressure persists.
The figures underline the difficulty of containing the financial burden of imported fuel amid volatile international markets, even after domestic price adjustments.
Hormuz route a major vulnerability
Bangladesh imports around seven million tonnes of fuel annually, including approximately 4.5 million tonnes of diesel, according to the Energy Division.
Around 70 per cent of the country’s imported fuel passes through the Strait of Hormuz, a strategic shipping route that carries roughly 20 per cent of global energy supplies.
Any disruption to shipping through the strait could therefore expose Bangladesh to further supply uncertainty and higher import costs.
With crude prices rising amid fears of a wider regional conflict, the country’s dependence on imported fuel leaves its energy sector vulnerable to external shocks.
Continued price volatility could further increase the cost of energy procurement and deepen the financial pressure on the government.