Allowing private companies to directly import and market refined petroleum products could lead to revenue losses, artificial shortages, hoarding, price volatility, substandard fuel and risks to national energy security, said a BPC committee.

The committee was formed after an application from Bashundhara Oil and Gas Company (BOGCL) on May 24.

To review the proposal, the Energy and Mineral Resources Division on July 14 formed an 11-member committee headed by AK Mohammad Shamsul Ahsan, the director (operations) of the Bangladesh Petroleum Corporation.

The committee submitted its nine-page report on July 19 opposing the direct private imports of refined fuel, describing fuel as a strategic product linked to national stability and energy security.

Seven days after the report was submitted, BPC Chairman Md Rezanur Rahman was removed and made an officer on special duty.

Then on August 6, the energy division instructed the BPC to draft the “Private-Sector Refined Fuel Import, Storage, Transportation, Distribution and Marketing Policy, 2026”.

BOGCL proposed importing 15–20 lakh tonnes of diesel, 2 lakh tonnes of octane, 1.5 lakh tonnes of petrol and 8–10 lakh tonnes of furnace oil annually.

Given Bangladesh’s annual petroleum demand is 68–70 lakh tonnes, the proposed imports would account for roughly 37–48 percent of the market, effectively placing a substantial share of the fuel market under the control of a single company.

Currently, BPC meets demand by refining crude at Eastern Refinery and importing refined products, which it distributes through its state-controlled network at government-set prices.

Even during periods of high global prices, the BPC sold diesel at Tk 115 a litre despite higher procurement costs.

Private importers, however, would make decisions based largely on international prices, exchange rates and profitability, the report said.

They could stockpile fuel expecting prices to rise or reduce imports when global prices surge.

“Fuel is not an ordinary consumer product,” the committee said, adding that transport, power generation, industry and agriculture depend on uninterrupted supplies.

Higher fuel prices could therefore raise the cost of goods and services and fuel inflation.

The committee also warned that private companies could create artificial shortages by controlling supplies, particularly during policy disagreements with the government.

If the BPC’s role is reduced, the state’s ability to respond to emergencies using its existing stocks, import contracts, vessels, depots and nationwide distribution network could weaken, it said.

Private operators could also prioritise profitable markets such as Dhaka, Chattogram, major cities and industrial zones while reducing supplies to remote areas where transportation costs are higher.

A large shift of imports to private companies could reduce the BPC’s business volume and government revenue, too.

In the last five fiscal years, the government has received around Tk 71,871 crore in revenue through the BPC, averaging about Tk 13,587 crore annually.

The committee also questioned whether major state investments to strengthen the BPC’s capacity would deliver their expected benefits if private imports were allowed.

These include the nearly Tk 31,000 crore Eastern Refinery-2 project, the Chattogram-Dhaka fuel pipeline, the Single Point Mooring project between Moheshkhali and Patenga, projects aimed at raising fuel storage capacity to 90 days and eight other ongoing projects.

Besides, multiple importers and supply chains could complicate quality monitoring and increase the risk of adulterated or substandard fuel.

Large companies with their own terminals, storage, transport and marketing networks could dominate the market and push out smaller operators, eventually allowing a few firms to form syndicates and manipulate prices.

The committee did not oppose private investment in the energy sector. It said private companies could invest in refineries, storage facilities and pipelines and import crude oil.

Allowing one company to import refined fuel could set a precedent for others, raising questions over how many firms should be allowed in and how much of the market should be opened.

Fuel prices would be difficult to control if the market were handed over to private companies, said Badrul Imam, honorary professor at the University of Dhaka’s department of geology.

If the fuel sector is privatised, state-owned marketing companies such as Padma, Meghna and Jamuna may become financially distressed, he said.

BPC Chairman Md Manzur Alam Pradhan could not be reached for comment.