According to ministry officials, meeting the country's growing energy demand requires leveraging private investment and infrastructure alongside public mechanisms. The policy also aims to foster a transparent and competitive market environment.
Minister for Power and Energy Iqbal Hasan Mahmud Tuku noted that in many countries worldwide, public and private entities compete within the same market to sell petroleum products. Citing India as an example, he mentioned that state-owned Indian Oil and private giant Reliance operate side by side, offering consumers choices among multiple service providers.
Currently, fuel prices in Bangladesh are regulated by the government and the state-run Bangladesh Petroleum Corporation (BPC), limiting price-based competition among distributors. The proposed framework aims to grant qualified private enterprises the authorization to import fuel oil.
The Minister stated that the draft policy remains under scrutiny. Once finalized, it will undergo the prescribed official approval process, including clearance from the relevant Cabinet Committee on Economic Affairs and Cabinet Committee on Government Purchase, before being presented to the Cabinet for formal approval. He advised against speculative discussions until the policy is officially declared.
Energy Division officials emphasized that the core objectives of the policy are to strengthen national energy security, maintain an uninterrupted supply chain, enhance market transparency and competition, and utilize private sector infrastructure to manage emergency or crisis situations. Stakeholders across the energy sector will be consulted before finalizing the policy.
At present, fuel oil import and marketing activities are largely controlled by BPC. Given increasing domestic fuel demand, industrial energy requirements, and power generation needs, the government considers sole reliance on BPC insufficient for long-term supply security. Recent global and regional conflict dynamics have further highlighted vulnerabilities in the supply chain.
Questions have also periodically arisen regarding BPC's operational efficiency and management. Industry observers argue that integrating private firms alongside state mechanisms will boost market competition, potentially improving operational efficiency and service quality over the long term.
Energy experts point out that Eastern Refinery, Bangladesh's sole large-scale petroleum refinery, is aging, and efforts to expand its capacity have progressed slowly. Consequently, over 75 percent of the country's refined fuel demand must be met through imports, increasing import dependency and placing pressure on foreign exchange reserves.
In contrast, neighboring India imports crude oil at competitive rates, refines it domestically to meet internal demand, and exports the surplus refined products. Experts suggest that encouraging large private investors to establish modern refineries in Bangladesh could similarly bolster domestic energy security. The government could facilitate such investments by providing land, infrastructure, and logistical support, or by exploring Public-Private Partnership (PPP) models.
However, stakeholders stress that granting import permissions to the private sector must be accompanied by strict qualification and safety standards. Prior to issuing licenses, authorities need to evaluate applicants' access to jetties or vessels, unloading and storage infrastructure, distribution networks, and financial capacity. Ensuring supply security, adequate reserve capacity, and fair market competition must also remain top priorities.
Energy expert Professor M. Tamim emphasized that an effective regulatory framework is the most crucial element in privatizing fuel imports and marketing. While private participation should be encouraged, it must operate within an open and competitive market structure guided by clear eligibility criteria, similar to the regulatory models used in India.
Economist Abu Ahmed remarked that an expanding economy cannot rely indefinitely on monopolistic structures. Transitioning toward public-private partnerships and competitive market dynamics in the energy sector is necessary to build a resilient economy. However, he noted that the government must maintain a strong regulatory role to ensure that private investments remain safe, transparent, and aligned with the public interest.
Overall, opening fuel oil imports to the private sector could introduce a new dimension to Bangladesh's supply infrastructure. Realizing its full benefits will require more than just granting import permits; it demands rigorous standards, transparent licensing, effective regulation, adequate storage reserves, and genuine market competition. Concurrently, expanding domestic refining capacity through major investments could reduce import dependency and significantly reinforce long-term energy security.
