On an overcast Eid afternoon this year, Mahadi Abdur Rauf, a Dhaka-based physician, found himself facing a dilemma that is becoming increasingly common across Bangladesh in the past week. Planning to travel from Dhanmondi to Khilgaon, he hesitated before taking his car out.
His fuel gauge showed less than half a tank, prompting him to consider calling an Uber in order to conserve what he described as “precious fuel.” However, after trying unsuccessfully for more than half an hour to secure a ride, he ultimately had no choice but to drive himself.
His concern soon proved justified. The following day, his car ran out of fuel entirely, and despite waiting in line for half an hour at a petrol station in Dhaka, he was unable to obtain any.
“It’s so frustrating,” Rauf told The Three. “My dread was proven right. Getting fuel now has become a hard and tiring task.”
Rauf’s experience illustrates how a global energy crisis has filtered down into the daily lives of ordinary citizens in Dhaka. What initially appeared to be a distant geopolitical disturbance in West Asia has now evolved into a direct and severe challenge for the country’s economy. The escalation of hostilities in the Persian Gulf has severely disrupted global energy markets, driving prices upward and tightening supply chains.
This has had immediate consequences for Bangladesh’s balance of payments and overall macroeconomic stability. At the heart of this disruption is the Strait of Hormuz, a critical global maritime chokepoint through which approximately 21 percent of global petroleum liquids pass.
Ongoing threats to this strait have heightened uncertainty in global energy markets, pushing prices to levels that are increasingly unsustainable for import-dependent economies.
Bangladesh is especially vulnerable due to its heavy reliance on foreign energy. Approximately 95 percent of the country’s fuel requirements are met through imports, exposing it to fluctuations in global prices and supply disruptions. In response to the worsening situation, the government has been compelled to implement emergency fuel rationing measures.
Although restrictions were temporarily eased during the Eid ul-Fitr holidays, shortages have persisted, underscoring the severity of the crisis. At the same time, the new government led by Prime Minister Tarique Rahman is actively seeking billions of dollars in external financing to secure supplies of fuel and liquefied natural gas (LNG) as part of broader efforts to stabilize the economy.
Rashed Al Mahmud Titumir, adviser to the prime minister on finance and planning, stated on March 20 that Bangladesh is currently in discussions with several major development partners. These include the Asian Development Bank, the World Bank, the International Islamic Trade Finance Corporation, and the Asian Infrastructure Investment Bank.
According to Titumir, there are encouraging signs that multilateral agencies will provide financial support aimed at sustaining oil and energy imports, which in turn would help accelerate economic growth. He also indicated that Bangladesh expects to receive approximately $1.3 billion from the International Monetary Fund under an existing program, along with an additional $250 million to $500 million.
This would be complemented by roughly $500 million in budgetary support from the Asian Development Bank.
The financial strain is particularly acute in the natural gas sector, where state buyers have increasingly turned to the volatile spot market for LNG procurement. Prices in this market have surged dramatically, recently peaking at $28.28 per million British thermal units (mmBtu), representing a 183 percent increase from the $10 baseline observed in January.
This sharp rise has a significant impact on Bangladesh’s foreign exchange reserves, which stood at $34.22 billion as of mid-March. To manage the situation and prevent panic buying, the Bangladesh Petroleum Corporation has introduced strict controls on fuel sales. Initially, motorcycle fuel purchases were capped at two liters, though this limit was later raised to five liters for ride-sharing operators.
Bulk diesel purchases now require formal documentation, and mobile courts have been deployed to monitor filling stations and prevent hoarding.
The effects of the crisis are being felt across multiple sectors of the economy. In order to prioritize electricity supply for the national grid, the government has shut down several fertilizer factories and imposed gas rationing across industrial zones. These measures pose a significant threat to the garment sector, which accounts for approximately 84 percent of Bangladesh’s total exports.
Any sustained disruption to this sector could have far-reaching implications for employment, export earnings, and overall economic growth. The severity of fuel shortages is also evident at the individual level.
Abdullah Al Mamum, a freelance market analyst based in Dhaka, reported traveling to at least seven different filling stations without success before finally finding fuel being dispensed at the Ramna filling station after hours of searching. “I don’t know whether I will have the energy and nerve to do this [searching] on a regular basis,” Mamun told The Three.
In an effort to reduce peak electricity demand, authorities have already taken the unusual step of temporarily closing universities during mid-Ramadan, targeting the high energy consumption associated with dormitories and laboratories. At the same time, the crisis has highlighted deeper structural weaknesses within Bangladesh’s energy system.
Domestic gas production has remained largely stagnant over the past decade, currently hovering at around 2,440 million cubic feet per day. This stagnation has forced the country to rely increasingly on imported energy sources, making it more susceptible to global market volatility. Although Bangladesh maintains a strategic diesel reserve sufficient for approximately 30 days, this buffer is limited in the face of prolonged disruptions.
To address these vulnerabilities, the Bangladesh Petroleum Corporation is working to diversify its supplier base. One significant development in this regard is the Bangladesh-India Friendship Pipeline, a 131-kilometer project that has emerged as a critical lifeline. In the first half of March, the pipeline delivered an emergency shipment of 5,000 tonnes of diesel from India’s Numaligarh Refinery, part of a broader commitment to supply 180,000 tonnes by 2026.
Bangladesh is also negotiating with India for an additional 50,000-tonne emergency buffer to support northern districts. In parallel, additional cargoes have been secured from international traders based in China and Singapore, including companies such as Vitol and Gunvor.
Despite these efforts, economists at the Centre for Policy Dialogue argue that the crisis is not merely logistical but also fundamentally mathematical. With global LNG prices consistently exceeding $20 per mmBtu, the subsidy burden on the national budget has become increasingly unsustainable.
Petrobangla estimates that the country’s fuel import bill for the current fiscal year will reach approximately 550 billion BDT, or $4.5 billion, with nearly 30 percent of imports sourced from the expensive spot market.
While Bangladesh Petroleum Corporation Chairman Muhammad Rezanur Rahman has expressed confidence that emergency procurement measures will prevent a total collapse of the power grid, he acknowledges that the long-term outlook remains closely tied to developments in the Middle East.
At the retail level, the crisis has generated widespread frustration among consumers. A faction of the Bangladesh Petrol Pump Dealers, Distributors, Agents and Petrol Pump Owners Association reported that daily allocations from oil distributors are insufficient to meet the growing demand.
In a Facebook post, the group noted that this shortfall has left fuel stations unable to serve millions of motorcycle users and other customers, while frontline workers struggle to cope with mounting pressure and occasional conflicts.
Syed Sajjadul Karim Kabul, a leader of the faction, explained that petrol pumps operate under fixed supply limits and cannot exceed their allocated volumes. He emphasized that panic buying is a major factor exacerbating the crisis, as long queues create a perception of scarcity and prompt more people to rush to fuel stations out of fear of future shortages.
The situation is further complicated by Bangladesh’s heavy reliance on imports from two particular Middle Eastern countries heavily affected by the escalation in the Gulf region. Approximately three-quarters of the country’s LNG imports in 2025 were sourced from Qatar and the United Arab Emirates, both of which depend on the Strait of Hormuz for exports.
A prolonged disruption of this route could have devastating consequences for Bangladesh’s energy supply. Analysts at Wood Mackenzie have suggested that South Asian LNG demand could decline by up to 3 million tonnes by the end of 2026, as regional buyers are increasingly priced out by competition from wealthier markets in Europe and East Asia.
In response, Petrobangla has fast-tracked long-term procurement to curb exposure to volatile spot markets, signing three new sales and purchase agreements with QatarEnergy and Excelerate Energy. The strategy aims to raise the share of term LNG cargoes to 86 percent by 2026, reducing reliance on high-cost spot purchases. QatarEnergy has already been a key supplier to Bangladesh under a 15-year agreement signed with Petrobangla on September 25, 2017.
However, uncertainty persists. Senior Petrobangla officials told the local media that QatarEnergy has declared force majeure until April 18 following disruptions, and it remains unclear whether this will be extended after a second wave of strikes on Ras Laffan, Qatar’s main LNG production hub.
Force majeure, a standard contractual clause, allows parties to suspend obligations without liability when extraordinary events — such as war, pandemics, or natural disasters — make fulfillment impossible.
Meanwhile, broader macroeconomic pressures are intensifying. The Bangladeshi taka continues to face downward pressure, and every $5 increase in global oil prices is estimated to add $500 million to the country’s annual import bill. These rising costs are ultimately passed on to consumers through higher transportation and irrigation expenses.
In the agriculturally significant northern regions, shortages of diesel for irrigation during the Boro rice season pose a serious threat to food security. To mitigate this risk, the government is prioritizing fuel distribution through the “Farmer Card” system and rural fuel depots, ensuring that the 1.38 million tonnes of refined petroleum products scheduled for the first half of 2026 reach the agricultural sector in time.
Ultimately, the crisis has forced Bangladesh to reassess its long-standing “import-first” energy policy. While the government has set a target of achieving 20 percent renewable energy by 2030, current contributions remain below 2 percent, leaving coal and gas to fill the gap.
As the Bangladesh Petroleum Corporation works to secure 185,000 tonnes of Jet A-1 fuel and 890,000 tonnes of diesel for the next quarter, it is becoming increasingly clear that reliance on volatile global markets is no longer a viable long-term strategy.
“The current emergency underscores the urgent need for domestic energy exploration and stronger regional integration,” energy expert M Tamim told The Three.
Without such measures, future geopolitical shocks — particularly those affecting critical supply routes like the Strait of Hormuz — could have even more devastating consequences, says Tamim.