Navigating Bangladesh’s energy crisis
By: SHAM ISLAM | The Bengali Roots | March 2026
The global Bengali diaspora tends to see an image of “Golden Bengal” through the tight-squeezing lens of growth and burgeoning industry, but recent escalations in the Middle East demonstrate that, no matter how strong the broad trend is, any economy influenced from outside is vulnerable. But as the rhythm of war drums grows ever louder in the Hormuz Strait, the diesel- and sweat-driven economic pulse of Bangladesh abruptly goes out of step.
Since February 28, air strikes and threats to the world’s most significant oil transport point in early March have led the present conflict to slide disastrously in international energy indices. If a country like Bangladesh, which needs to import nearly 80% of the 4.3 million tonnes of diesel it uses a year, gets a high “sticker shock”, a national crisis is not just one more throwaway line item on the balance sheet; it points toward total bankruptcy. The Technique of Sniping
What is remarkable is how rapidly the crisis has emerged. Data from the Bangladesh Petroleum Corporation show that all hell broke loose in market dynamics between February 27 and the end of March. On February 27, the international price of diesel was a manageable $88.44 a barrel. Less than a month later, it had risen by some 167% to $236.60. A similar, though not quite as acute, trend was observed for octane and jet fuel.
This volatility is not far from home. It is currently berthed at the Chittagong port. In March, two diesel-powered vessels came here; the combined price tag was TK 3.3bn higher than last year’s estimate! So far, the total additional cost of importing oil and fuel has amounted to nearly 10 billion Takas.
Walking the Tightrope of Subsidies
A “serial count of imports” requires fuel and other inputs (the latter from PXEAs or petroleum) to be counted so that they can be converted into foreign currency. As such, there is an equal necessity for export earnings here: If we want to import more goods than ever before but are unwilling to increase production at home, then this will become impossible. Not according to living wholly on what is provided us through gifts from others, like some tribe The “disquieting truth”, as economists are calling it in China and Russia, refers to the “price gap” that has become a thorn in everyone’s side.
Of course, this coverage comes at a price. While oil prices continue to rise in international markets, the Bangladesh government has mostly kept diesel prices at home steady year after year as part of measures designed to buffer people from inflation.
This post has consequences, however. Officials at BPC say that the corporation is currently losing a stunning Tk 68–69 per litre on diesel. Though BPC reported profits of Tk 40 billion last fiscal year, reserves are being eaten up at an alarming rate by these losses.
“The days to come won’t be easy. As a result of the war, oil prices will go up, commodities will also rise in price, and this squeeze will be felt by the nation as well.”
— Mirza Fakhrul Islam Alamgir, BNP Secretary General and Local Government Minister.
Sectoral Impacts: Toppling the First Domino
While the buses and mills industries have been temporarily let off the hook due to the government’s refusal to raise diesel prices, the air carrier business is already in a swivet. The Bangladesh Energy Regulatory Commission (BERC) has just jacked up domestic jet fuel prices to Tk202.29 per litre – nearly double the price of a month ago.
If this trend continues into diesel, which accounts for 63% of our country’s total fuel consumption, the impact on irrigation, power generation, and the cost of daily necessities will be felt immediately and severely.
Strategy on a Turbulent Horizon
The experts, such as the Centre for Policy Dialogue (CPD)’s Khondaker Golam Moazzam, contend that the era of “business as usual” is now over. (CPD)—say there are three areas of immediate consensus for action:
Austerity: The whole country ditches luxuries and optional items. Rationing: Use a prioritised supply chain to keep industries and farming fuelled.
Short-Term Flexibility
This means abandoning long-term contracts in favour of 90-day planning cycles to dodge the daily gyrations of a wartime market. The renovating economy. As Bangladesh rolls out of this geopolitical storm, the strength of its recovery will depend on how well it balances fiscal responsibility with the need to shelter its most vulnerable citizens, lest they fall victim to the heat of a distant fire. Editor’s Note: The crisis described here is a stark reminder of the interconnectedness of the modern world. For Middle Eastern readers, the conflict is a locally acceptable fact of life; for Western readers, it is a geopolitical front-page headline. But for the 170 million people living in Bangladesh, it is a direct threat to something as basic as the price of a plate of rice or the bus fare. As the editorial board, we believe now is the time for total transparency in energy policy. Although the government’s refusal to raise prices reflects empathy, the sustainability of this kind of subsidy is questionable. At the same time, we want to encourage a “middle-of-the-road” pattern, beginning with targeted subsidies for the agricultural sector so that there’s enough to eat, and then slowly letting prices go up and down in a state of flux that everyone can follow. The “Bengali roots” are deep, but they require a stable environment and continuous further growth.
