Bangladesh raises fuel prices as Iran war drives up costs

DHAKA: Bangladesh has raised retail fuel prices by 10 percent to 15 percent, citing a sharp surge in global crude oil prices and tightening supplies caused by the ongoing Middle East conflict, the energy ministry said late on Saturday.

Under the new rates, petrol will sell at 135 taka (USD1.10) per litre, up from 116 taka, diesel at 115 taka and kerosene at 130 taka, according to an official notification.

Officials said the increase was unavoidable as rising crude prices, supply chain disruptions and higher freight and insurance costs pushed up import expenses in recent weeks, particularly after oil prices have jumped during the seven-week-old Iran war.

The rising fuel bill in Bangladesh, which relies heavily on imported fuel, is putting pressure on the South Asian nation’s strained foreign exchange reserves.

The government initially sought to cushion consumers through subsidies, delayed price adjustments, tighter stock controls and efforts to diversify supply, but authorities said those measures had become increasingly difficult to sustain as global prices continued to climb.

Dhaka has already sought more than USD2 billion in external financing to secure energy imports.

Fuel shortages have caused long queues at filling stations, with officials blaming panic-buying and hoarding for worsening the situation.

The latest price hike is expected to add to inflationary pressures, especially in transport and agriculture, where diesel is widely used, potentially lifting food prices and overall living costs.

Bangladesh joins a growing number of countries adjusting domestic fuel prices in response to soaring global oil markets.