Tensions in the Middle East cause a sudden hike in diesel prices, raising fuel import costs and adding pressure on Bangladesh’s economy
In June 2025, Bangladesh had to pay an extra Tk 68 crore (680 million taka) for one shipment of diesel. The reason? A sudden rise in global oil prices caused by growing tension between Iran and Israel.
The fuel was imported by Bangladesh Petroleum Corporation (BPC), the government organization that brings fuel into the country. The diesel came from Malaysia, loaded onto a ship on June 13. It reached Chittagong Port on June 18 and finished unloading on June 22. But because of international price hikes during those days, the total cost was much higher than expected.
Why Did the Diesel Cost So Much More?
BPC sets fuel prices based on the average global market rate over five days — two days before the shipment was loaded, the day it was loaded, and the next two days.
When this particular shipment was loaded on June 13, oil prices were rising fast. That’s because Iran and Israel were involved in new military tensions, and investors feared oil supplies might be disrupted. As a result, the average price of diesel during those five days jumped to USD 83.84 per barrel.
The shipment had 34,617 tonnes of diesel, which equals about 257,949 barrels. Because of the higher price, the total cost was around USD 216.26 million — about Tk 265 crore.
If the same shipment had been loaded just a few days earlier, when diesel prices were about USD 76.69 per barrel, it would have cost only around Tk 197 crore. That means Bangladesh had to pay Tk 68 crore more for this one shipment.
Where Did the Diesel Come From?
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Supplier: Indian Oil Corporation
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Loaded in: Malaysia
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Ship Name: MT PIVTI Avirat
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Arrival Port: Chittagong
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Arrival Date: June 18
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Unloading Finished: June 22
The diesel was imported under a government-to-government agreement. Payment is usually made within 30 days of receiving the shipment.
How the Iran-Israel Conflict Affected Prices
Even though oil wasn’t physically blocked, markets panicked because the Strait of Hormuz — one of the world’s busiest oil shipping routes — could be affected. That fear alone was enough to cause oil and diesel prices to rise sharply.
Oil prices are very sensitive to political tensions, especially in the Middle East. Any threat to supply or transport often causes big price increases. Bangladesh, which imports almost all of its fuel, is directly affected by these global changes.
What This Means for Bangladesh
This single shipment shows how much international events can affect Bangladesh’s economy.
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Higher Prices for Goods and Services:
Diesel is used for transport, farming, factories, and generators. If diesel becomes more expensive, everything else — like food, transport, and products — can also cost more. -
Pressure on the Budget:
If the government doesn’t want to raise fuel prices for the public, it must give more subsidies. That puts pressure on the national budget. -
Foreign Currency Use:
Bangladesh pays for imported fuel in US dollars. An increase in fuel prices means the country must use more dollars, which affects foreign currency reserves.
Shipping Costs Could Also Rise
Even though the Tk 68 crore extra was due to the price of diesel itself, future shipments may also face higher shipping and insurance costs.
When there are conflicts in areas like the Middle East, shipping companies often increase their charges. Some ships may take longer routes to avoid risky areas, which adds time and cost.
If this continues, Bangladesh may have to spend more not just on the diesel itself, but also on getting it here.
What Can Be Done to Reduce These Risks?
Experts say Bangladesh can take several steps to avoid similar problems in the future:
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Build Fuel Reserves:
If the country stores extra diesel, it can avoid buying fuel when prices are high. -
Buy Fuel from Different Countries:
Depending on just one or two sources is risky. Diversifying can help keep prices stable. -
Use Renewable Energy:
Using more solar power or other renewable energy can reduce the need for diesel. -
Encourage Efficient Use:
Promoting fuel-efficient vehicles and machines can lower the total diesel demand. -
Track Global Prices Closely:
Watching international markets carefully can help plan purchases at better prices.
Final Thoughts
This one diesel shipment cost Bangladesh Tk 68 crore more than expected. That’s a big amount for just one delivery. And it happened mainly because of a conflict far away, in the Middle East.
This shows how global events — even if they don’t directly affect Bangladesh — can hurt the economy. That’s why experts say Bangladesh needs better planning, fuel reserves, and long-term strategies to avoid being hit hard by such price shocks in the future.
Bangladesh’s economy depends on stable fuel prices. When those prices rise suddenly, everyone — from farmers to factory owners to regular families — ends up paying the price. So the time to act is now, before the next crisis hits.
source : prothomalo
