Bangladesh has raised fuel and gas prices despite a decline in international rates, prompting concern among consumers and experts over policy inconsistency and inflationary pressure.
The latest hike comes after global energy market volatility triggered by the Russia–Ukraine war and the Iran–United States conflict. During both periods, the government increased fuel prices. However, the current adjustment has drawn criticism as global prices have recently eased.
Experts warn that higher fuel costs will raise transportation expenses for passengers and goods, increase agricultural and industrial production costs, and ultimately push up overall inflation.
Energy expert Professor Shamsul Alam said the government’s decision is unfair to citizens, noting that prices were not increased when global rates were high but have been raised as international prices decline. He warned the move could erode public trust and have serious consequences.
Energy expert Ijaz Hossain, however, said subsidies cannot be sustained indefinitely and described moderate price increases as reasonable, noting similar moves in other countries. He added that higher prices may encourage more cautious energy use but urged the government to prevent excessive fare hikes and profiteering that could worsen public hardship.
Global vs domestic pricing
Global fuel prices are largely determined by Brent crude oil benchmarks, though domestic tariffs, commissions and distribution systems also affect retail rates.
During the Russia–Ukraine war, Brent crude rose from $80–$90 per barrel in January 2022 to $139 in March before falling to $85 by year-end. In August 2022, Bangladesh raised diesel and kerosene prices by 42% to Tk 114 per liter, and octane and petrol by 51% to Tk 135 and Tk 130, respectively, citing losses by Bangladesh Petroleum Corporation (BPC) and smuggling concerns.
In January 2023, prices were reduced by Tk 5 per liter across fuels amid criticism, but not in line with global declines.
From March 2024, Bangladesh adopted an International Monetary Fund (IMF)-backed pricing mechanism, aligning domestic fuel prices with international markets. This helped reduce prices slightly and enabled BPC to recover losses and make profits.
Brent crude traded between $75 and $90 per barrel in 2024 and $75–$85 in 2025, during which domestic prices remained stable without subsidy pressure.
Following the recent Iran conflict, Brent crude briefly rose to $120 but has since stabilized around $90. Despite this, Bangladesh increased fuel prices effective Monday: diesel to Tk 115 from Tk 100, kerosene to Tk 130 from Tk 112, petrol to Tk 135 from Tk 116, and octane to Tk 140 from Tk 120 per liter.
The government says the hike is aimed at reducing financial losses, though questions persist over the timing.
LPG, electricity next
Alongside fuel, liquefied petroleum gas (LPG) prices were raised again, with a 12kg cylinder increasing by Tk 212 to Tk 1,940.
Electricity tariffs may also rise. The Bangladesh Power Development Board (PDB) said it will submit a report to a cabinet committee outlining production costs, deficits and pricing options. A committee formed on April 9 is reviewing the matter.
Market impact
The effects are already visible, with transport fares rising for buses, trucks and other vehicles. Higher fuel costs are expected to increase the price of essential goods, as transportation becomes more expensive.
Agriculture and industry are also likely to face higher production costs due to dependence on fuel for irrigation, machinery and raw material transport. Analysts say the added burden will ultimately fall on consumers.
