BPC serves as the primary state-run entity responsible for importing, storing, marketing, and distributing petroleum products across Bangladesh. Its financial performance depends on the margin between international purchase costs—including crude and refined oil prices, freight rates, shipping insurance, and logistical expenses—and regulated domestic retail prices.
While BPC maintained profitable operations in recent years owing to relatively stable international crude oil prices, conditions deteriorated rapidly following escalating conflicts involving Iran, the United States, and Israel. The conflict pushed up global fuel prices along with shipping freight and war-risk insurance premiums. Because domestic prices were not adjusted proportionally, BPC was forced to sell fuel at rates below import costs.
According to BPC data, the average import price of diesel stood at approximately $86 per barrel prior to the conflict, climbing to nearly $120 in June. During the same period, octane prices surged from $73 to $104 per barrel. Although the market experienced brief relief toward the end of June, renewed geopolitical tensions in July triggered another upward trend.
The crisis directly impacted BPC’s operational expenses. Disruption to shipping routes in the Strait of Hormuz—a vital Persian Gulf transit point—substantially increased maritime transportation risks and costs. Given Bangladesh's high reliance on Middle Eastern fuel imports, these global dynamics severely strained the domestic supply chain.
Earlier, during peak international price surges, BPC formally requested government subsidies, noting that while diesel was sold locally at Tk 100 per liter, its import cost had surged to Tk 203.84 per liter—resulting in a loss of Tk 103.84 per liter.
Similarly, octane was sold at Tk 120 per liter against an import cost of Tk 151.61 per liter, incurring a loss of Tk 31.61 per liter. BPC warned the ministry at the time that total projected losses could exceed Tk 30,561 crore if prices were not adjusted. In response, the government raised domestic fuel prices on April 19.
Despite the price adjustment, BPC’s losses persisted as international market conditions remained volatile. Consequently, a revised subsidy request covering losses between March and June was submitted to the Finance Ministry.
According to a letter dated July 28 from the Ministry of Power, Energy, and Mineral Resources, BPC incurred a loss of Tk 2,248 crore in March, Tk 7,866 crore in April, Tk 2,621 crore in May, and Tk 5,963 crore in June. The cumulative four-month loss reached Tk 18,699.31 crore.
The ministry's communication noted that while international fuel prices rose sharply due to the war, domestic retail prices were not raised proportionately to protect consumers and maintain stable national supply lines. The Ministry of Finance has been urged to allocate Tk 18,699.31 crore to offset these procurement losses.
Despite these recent losses, BPC maintained a strong financial standing in preceding fiscal periods. In FY 2024-25, the corporation recorded a net profit of Tk 4,216 crore from fuel sales, up from Tk 3,943 crore in FY 2023-24—marking an annual profit increase of Tk 273 crore.
In FY 2024-25, BPC imported a total of 6,215,929 metric tons of fuel oil at a cost of Tk 50,195 crore. This included 1,510,944 metric tons of crude oil valued at Tk 10,503 crore.
Additionally, 4,704,985 metric tons of refined petroleum were imported for Tk 39,692 crore. Within refined imports, diesel, octane, jet fuel, and kerosene accounted for Tk 36,442 crore, while furnace oil and marine fuel accounted for Tk 3,248 crore.
Following significant price adjustments in 2022 amid foreign exchange pressures and global price spikes, Bangladesh introduced an automated monthly fuel pricing mechanism in March 2024 to align domestic prices with international benchmarks.
Muhammad Morshed Hossain Azad, General Manager of BPC’s Finance Division, stated that while the subsidy application has been submitted to the Finance Ministry, an official response remains pending. He expressed optimism that the government would respond favorably.
Addressing BPC’s past profitability, Azad clarified that prior to the escalation of the Middle East conflict, BPC contributed nearly Tk 71,000 crore to the government exchequer in taxes and VAT following the implementation of automated pricing. Furthermore, around Tk 11,500 crore was deposited into a government development fund, with remaining profits utilized to finance infrastructure projects and maintain supply liquidity.
Nevertheless, the recent global price shocks have placed renewed financial pressure on BPC, government revenues, and national subsidy allocations. Energy analysts warn that if geopolitical tensions persist, import expenditures and subsidy demands could increase further.
