Bangladesh’s fuel import bill hit a record $10.63 billion in the 2025-26 fiscal year, more than doubling from the previous year, as higher international prices and increased domestic demand pushed up costs.
According to the latest Bangladesh Bank data, the country spent $10.63 billion on crude oil and petroleum product imports in FY2025-26, compared with $5.14 billion in FY2024-25. The increase was $5.49 billion, or about 107%.
By comparison, the country’s overall import payments increased by 10.1% during the same period, rising from $68.35 billion to $75.24 billion.
This means roughly one in every seven dollars spent on imports went towards fuel. At the current exchange rate, the $10.63 billion bill is equivalent to more than 130,000 crore.
The sharp rise in the fuel import bill is likely to have wider implications for production costs, transport fares, electricity generation, industrial competitiveness, inflation and foreign exchange management.
Refined petroleum products drive increase
The largest share of the increase came from refined petroleum products, on which Bangladesh relies heavily.
Bangladesh Bank data shows that the country spent around $1.2 billion on crude oil imports in FY2025-26, up from $620 million a year earlier. This represents an increase of about 92%.
Meanwhile, imports of refined petroleum, oil and lubricant products cost $9.44 billion, compared with $4.51 billion in FY2024-25 — an increase of 109.1%.
The bulk of the fuel import bill therefore came from refined products, including diesel, gas oil, jet fuel, furnace oil, petrol and octane.
Fuel import bill hits record high
The change becomes clearer when the fuel import bill is compared over several years.
Bangladesh spent around $7.99 billion on fuel imports in FY2021-22, when the global energy market was disrupted by the post-pandemic economic recovery and the Russia-Ukraine war.
The bill fell to $5.77 billion in FY2022-23 before rising slightly to $6.13 billion in FY2023-24. It then declined to around $5.14 billion in FY2024-25.
However, the figure surged to $10.63 billion in FY2025-26, marking the highest level on record.
Import volume also rises
The increase in the fuel import bill was not driven by international prices alone. Domestic demand also increased.
According to Bangladesh Petroleum Corporation, the country’s fuel demand stood at around 7.4 million tons in FY2025-26.
Between July and March of the fiscal year, Bangladesh imported around 5.74 million tons of fuel, compared with approximately 5 million tonnes during the same period a year earlier.
The higher import volume, combined with increased international prices, put additional pressure on the import bill.
The imports included diesel, crude oil, furnace oil, petrol, octane, jet fuel and base oil.
Refined fuel prices rise faster than crude
Another factor behind the increase was the sharper rise in the prices of refined products compared with crude oil.
During FY2025-26, the average international price of refined petroleum products such as gas oil, diesel and jet fuel increased by around 17.6% to $835 per ton.
Crude oil prices, meanwhile, increased by around 10.4%.
As Bangladesh imports a large share of its energy requirements in refined form, the rise in refined fuel prices has had a greater impact on its import bill.
Refined fuel prices are influenced not only by crude oil prices but also by refining costs and margins. Supply disruptions, limited refining capacity and sudden increases in demand can further push up prices.
June fuel import bill hits $1.6 billion
The scale of the pressure was particularly evident in June, when Bangladesh spent around $1.6 billion on fuel imports, according to Bangladesh Bank data.
The average monthly fuel import bill during FY2025-26 was around $886.2 million.
The June figure was therefore significantly higher than the monthly average, adding further pressure to the import bill towards the end of the fiscal year.
Global market instability a major factor
Global fuel prices have remained volatile in recent years.
Demand rose sharply as the global economy recovered from the Covid-19 pandemic, followed by further disruption after Russia invaded Ukraine in 2022.
More recently, tensions in the Middle East have added to uncertainty in the global energy market. Oil prices tend to rise rapidly when there are concerns over disruptions to supply.
Energy expert M Tamim said Bangladesh’s fuel import costs have risen mainly because of higher demand and prices.
The cost could rise further if global oil prices remain elevated, he said.
For an import-dependent country such as Bangladesh, higher oil prices increase not only fuel import costs but also expenses related to transport, power generation and industrial production.
Impact on inflation
Higher fuel import costs can affect the economy at several levels even when domestic fuel prices remain unchanged.
Diesel and other fuels are widely used in factories and for transporting goods. Liquid fuels are also used in some power plants, while agricultural machinery, irrigation, shipping and road transport all depend heavily on fuel.
Higher energy costs can therefore raise production and transportation expenses. If businesses pass some of those additional costs on to consumers, the pressure eventually reaches retail prices.
The record increase in fuel import costs could consequently add to inflationary pressures.
Rising production costs for industries
The fuel import bill is also closely linked to the condition of the country’s industrial sector.
Bangladesh is already facing a gas supply shortage, particularly in industrial areas. Many factories have reduced production because of low gas pressure, while some have turned to diesel as an alternative.
However, using diesel instead of gas significantly increases production costs. This creates a double burden for businesses: lower production and higher per-unit costs.
The impact is particularly significant for energy-intensive sectors such as ready-made garments, textiles, dyeing, steel, ceramics, glass and chemicals.
Higher production costs also make it more difficult for Bangladeshi manufacturers to remain competitive in international markets.
Mohiuddin Rubel, founder and CEO of Bangladesh Apparel Voice and a former director of BGMEA, told Bangla Tribune that rising fuel import costs were putting pressure not only on foreign exchange but also on industrial production and export competitiveness.
"Especially in export-dependent industries like ready-made garments, it is becoming difficult to manage the uncertainty of fuel supply and increased production costs at the same time," he said.
Rubel said Bangladesh’s garment sector was already facing intense price and supply competition in international markets.
"If factories cannot operate at full capacity because of gas shortages and have to use diesel or other relatively expensive fuels as alternatives, production costs increase further," he said.
He added that manufacturers could not always pass the additional costs on to international buyers, putting pressure on profits, investment and employment.
"The current energy crisis should not be seen as a temporary problem. Gas production in the country has been declining for a long time, while demand and import dependence are increasing," Rubel said.
He called for increased domestic gas exploration and extraction, greater LNG import capacity, adequate storage facilities and diversification of energy sources.
"Uninterrupted energy supply for industry is now not just a demand of businessmen; it is directly related to the country’s exports, employment and foreign exchange earnings," he said.
Rubel also called for a long-term energy plan covering the next 10 to 15 years.
LNG imports rise amid gas shortage
The government has also moved to increase LNG imports to maintain gas supplies amid the rising fuel import bill.
On August 19, the Cabinet Committee on Economic Affairs gave in-principle approval to purchase 14 LNG cargoes from seven companies through the direct purchase method to meet national emergency needs.
Two cargoes will be purchased from each company.
Separately, the Cabinet Committee on Government Purchase approved a proposal to import one LNG cargo from Singapore-based Aramco Trading Singapore Pte Ltd. The cargo is scheduled for delivery between September 1 and 2 at a price of $23.93 per MMBtu. It will be the 44th LNG cargo of the year.
Demand for gas in industries, power plants and fertilizer production continues to rise, increasing Bangladesh’s dependence on LNG imports.
The government is therefore relying on spot-market purchases, long-term contracts and direct procurement to maintain gas supplies.
Some other import costs decline
While the fuel import bill reached a record high, the cost of some other imports declined.
According to Bangladesh Bank, Bangladesh spent around $5.03 billion on consumer goods such as edible oil, sugar, pulses, spices, milk and cream in FY2025-26, compared with $5.68 billion a year earlier.
This represents a decline of around $650 million, or 11.4%.
Rice imports also fell. Bangladesh spent less than $530 million on rice imports in FY2025-26, compared with more than $680 million in the previous fiscal year — a decline of around 22.5%.
However, wheat import costs increased. The country spent around $2.05 billion on wheat imports in FY2025-26, up 26.1% from $1.62 billion a year earlier.
Mixed picture in industrial imports
Import data also show that demand varied significantly across sectors.
Imports related to the ready-made garment sector declined by around 4% to $17.7 billion in FY2025-26.
Imports of iron, steel and other base metals also fell, as did imports of plastic and rubber.
By contrast, imports of intermediate goods increased by around 15% to $19.35 billion.
Imports of capital goods also increased, indicating continued demand for investment and production equipment in some sectors.
Imports of fertilizers, oilseeds, chemicals and medicines also increased.
The overall rise in imports therefore was not driven solely by consumer goods; several industrial and production-related products also contributed.
Why is the dollar market relatively stable?
A key question is why the foreign exchange market has remained relatively stable despite the sharp rise in fuel import payments.
A Bangladesh Bank official told Bangla Tribune that the dollar exchange rate had remained between Tk122 and Tk124 for a considerable period and that banks were currently facing no major difficulty in sourcing dollars.
The official attributed the stability largely to stronger remittance inflows.
While higher fuel import costs are increasing demand for foreign currency, increased remittances are simultaneously boosting the supply of dollars.
As a result, Bangladesh’s foreign exchange reserves have returned to relatively comfortable levels.
According to the latest estimate, the country’s gross foreign exchange reserves exceed $37 billion, while reserves calculated under the International Monetary Fund’s BPM6 methodology stand above $32 billion.
However, relying solely on remittances will not be enough to sustain this position. Higher export earnings and other stable sources of foreign exchange will also be necessary.
Low investment remains a concern
Another weakness in the economy is the slow pace of investment.
Bankers say private-sector investment interest has declined because of factors including gas and electricity shortages, high interest rates and the law and order situation.
Private-sector credit growth has fallen to 4.47%, one of the lowest levels on record.
Low investment can temporarily limit import demand and reduce pressure on the dollar market. But it also means fewer new production facilities, jobs and export capacities are being created.
Therefore, if the stability in the foreign exchange market is partly the result of weak investment rather than stronger economic activity, it may not be sustainable in the long term.
How can Bangladesh reduce energy import pressure?
The record fuel import bill is a warning for Bangladesh and highlights the need to reduce excessive dependence on imported energy.
First, domestic gas exploration and extraction need to be accelerated, while investment in renewable energy and energy efficiency should be increased.
Second, Bangladesh could strategically increase fuel reserves when international prices are relatively low. Energy expert M Tamim has stressed the need for maintaining fuel reserves equivalent to at least one and a half months of consumption.
Third, the government needs to strike a balance between spot-market purchases and long-term LNG contracts while preparing for international price volatility.
Fourth, fuel demand forecasting and stock management need to be strengthened to prevent supply disruptions from triggering panic buying and unnecessary increases in consumption.
Saving dollars is the bigger challenge
The $10.63 billion fuel import bill is more than a sector-specific figure. It represents a major and potentially persistent source of pressure on Bangladesh’s foreign exchange.
Remittances and export earnings are bringing in dollars, but a substantial amount is simultaneously being spent on fuel imports.
If international oil prices rise again, the import bill could increase further, putting pressure on imports, inflation and demand for foreign currency.
Therefore, sustaining the current stability in reserves and the dollar market will require more than import controls. Bangladesh will need to increase exports, attract investment, curb illicit capital outflows and implement long-term reforms in energy management.
A major test ahead
Bangladesh is at a point where foreign exchange conditions have improved while energy costs have reached record levels.
Overall import payments increased by around 10%, while fuel import costs surged 107%. The pressure on the energy sector is therefore far greater than the overall increase in imports.
The impact is already being felt in industrial production and transportation costs. Gas shortages are forcing some industries to cut production, while switching to liquid fuels further increases costs. At the same time, the government is increasing LNG imports to address the gas shortage.
Bangladesh’s energy security is consequently facing pressure from both sides — a rising dollar bill for petroleum imports and additional LNG costs to meet the gas deficit.
Maintaining supply will therefore not be enough. The government must also consider the price at which fuel is purchased, how efficiently it is used, how long reserves can sustain demand and how dependence on imports can be reduced.
If the record fuel import bill persists, the impact will extend beyond the import account, creating longer-term pressure on production costs, inflation, industrial competitiveness and foreign exchange.
The $10.63 billion fuel import bill for FY2025-26 should therefore be viewed not merely as a record figure, but as a warning for Bangladesh’s energy security, foreign exchange management and industrial future.
