A sharp rise in jet fuel prices has driven up airfares on both domestic and international routes, placing Bangladesh’s aviation sector under significant pressure.
Passengers are now paying at least Tk1,500 more on average for domestic tickets, while fares on international routes have increased by over Tk5,000 per ticket. The surge has triggered widespread frustration among travellers, with industry stakeholders warning of a deepening crisis.
The situation has been exacerbated by volatility in global energy markets, particularly due to ongoing tensions in the Middle East.
Fuel price surge outpaces regional peers
While Bangladesh has significantly raised jet fuel prices, neighbouring countries such as India and Nepal have kept rates largely unchanged. In contrast, prices have increased by 24.5% in Pakistan and 18.54% in the Maldives. In Bangladesh, however, the hike has reached nearly 80%.
Mofizur Rahman, general secretary of the Aviation Operators Association of Bangladesh (AOAB) and managing director of Novoair, described the increase as “unusually high” compared to regional standards.
He noted that there is no supply shortage, as around 25 oil tankers have arrived in the past 22 days and fuel has been procured at near-previous prices. “In such a situation, this price hike appears unjustified,” he said.
Costs surge amid policy and market pressures
Aviation insiders say jet fuel prices have increased by Tk107 per litre within just 16 days, creating panic across the sector.
According to the latest government decision, the price of jet fuel for domestic routes has risen from Tk112.41 to Tk202.29 per litre—an increase of Tk89.88. For international routes, the price has gone up from $0.7384 to $1.3216 per litre.
Earlier, on March 8, prices were raised from Tk95.12 to Tk112.41 domestically and from $0.62 to $0.7384 internationally.
The Bangladesh Energy Regulatory Commission (BERC) said the adjustments were made considering global Platts pricing, exchange rates, and transportation costs. Jet fuel prices in Asia have climbed to around $163 per barrel amid global market instability.
Airfares surge, passengers hit hard
The impact on ticket prices has been immediate and severe.
On key domestic routes from Dhaka to Chittagong, Sylhet, Cox’s Bazar and Saidpur, fares that previously ranged between Tk4,000 and Tk4,500 now start from Tk6,000 to Tk7,000. Last-minute tickets often exceed Tk10,000.
Travel to Cox’s Bazar, a major tourist destination, has become increasingly unaffordable, with ticket prices rising to Tk7,000–Tk8,500 from around Tk5,500 previously.
On international routes, passengers report paying Tk10,000–Tk12,000 more for destinations such as Kolkata, Mumbai, Chennai, Jeddah and Riyadh.
Abdur Rahman, a frequent business traveller, said: “I travel to Saidpur three times a week. What used to cover a round trip now isn’t enough for a one-way ticket.”
Another passenger, Raju Ahmed, said he postponed a planned family trip due to high fares. “For four people, the return tickets would cost Tk15,000–Tk16,000 more than usual. We had no choice but to cancel,” he said.
Airlines warn of operational risks
Private airlines including US-Bangla Airlines, Novoair and Air Astra say the sharp rise in fuel costs is threatening their operations.
Industry sources say fuel accounts for nearly 50% of an airline’s operating expenses. The sudden increase has significantly raised operational costs, forcing airlines to reconsider flight frequency and route viability—particularly on less profitable routes.
A senior airline official said: “We are not increasing fares arbitrarily. Fuel prices have risen sharply over the past two years, and the depreciation of the local currency against the US dollar has further increased costs. There was no alternative.”
Experts call for policy support
Aviation expert Kazi Wahidul Alam urged the government to consider subsidies or tax relief to stabilise the sector.
He suggested reducing VAT and taxes on jet fuel, ensuring special letter of credit (LC) facilities during the ongoing dollar crisis, and reassessing airport development fees.
“If prices are not aligned with the global market, both airlines and passengers will continue to suffer,” he warned.
Broader economic implications
Experts caution that sustained high fuel prices could shrink Bangladesh’s aviation market, affecting not only airlines but also tourism, trade and overall economic growth.
Jet fuel prices have risen by more than 150% over the past three years—from Tk46–48 per litre in FY2021–22 to over Tk200 currently—marking an unprecedented increase in the sector.
Stakeholders warn that without timely policy intervention, the aviation industry may face long-term structural challenges, with potential ripple effects across the broader economy.
