‘Helpless, speechless’

Bangladesh woke up to another fuel price hike on Monday, with the government raising prices of diesel, petrol, octane and kerosene by Tk20 a litre.

With the new pricing, the country's most widely used petroleum fuel, diesel, now costs Tk135 a litre, up from Tk115. Petrol has risen to Tk160 from Tk140, octane to Tk165 from Tk145, and kerosene to Tk155 from Tk135.

In percentage terms, the increases range from 13.8% for octane to 17.4% for diesel.

The public reaction to the decision was immediate.

News of the increase triggered queues at filling stations as motorists attempted to purchase fuel before the new prices came into effect.

Rahat Kabir, a mid-rank employee of a private bank, said the immediate additional cost is Tk200 per refill for a motorcyclist who normally purchases 10 litres at a time.

‘The number is small in isolation but meaningful when repeated over a month, particularly for people already dealing with elevated food and living costs,’ he added.

Priyonti Saha, a private car owner, said filling a 40-litre car tank at the new rate costs Tk800 extra.

‘The price hike has become a trend. Fuel is just one of many. From food to fuel, fashion and everything else is becoming unusually expensive very quickly. It seems that things have gone out of our hands now. We are concerned about what comes next.’

Homemaker Arani Haque said, ‘Our four-member family already struggles to survive on my husband’s earnings in the capital. The way overall expenses are increasing, we feel helpless and speechless.’

A farmer in Jashore, Pilu Khan, said, ‘We are afraid the cost of irrigation would be extremely high now as the price of diesel has gone up sharply. We already face challenges to make ends meet. Not sure what will happen this time.’

Contacted, Dr Badrul Imam, honorary professor at the Department of Geology in the University of Dhaka, said fuel occupies a unique position in the economy because it is both a final consumer product and an input into almost everything else.

He also warned of the ripple effect of the fuel price hike on everyday life.

Dr Imam said commuters and transport operators could be the first victims of the price hike while the agriculture and manufacturing sectors would be particularly vulnerable.

‘A truck carrying potatoes from a northern district to Dhaka needs fuel. A farmer operating a diesel irrigation pump needs fuel. A factory operating a backup generator during an electricity disruption may need fuel.’

WHY THIS HIKE?

The country introduced an automatic fuel-pricing mechanism in March 2024 that makes domestic petroleum prices move with the international market.

In September 2024, for example, diesel and kerosene were reduced to Tk105.50 a litre, petrol to Tk121, and octane to Tk125. The previous months had also seen comparatively small adjustments – often between Tk1 and Tk6 per litre.

That pattern changed dramatically in 2026.

At the beginning of January, diesel was priced at Tk102, petrol at Tk118, octane at Tk122 and kerosene at Tk114 after a Tk2 reduction from the previous month's prices.

By April, the government was confronting a radically different international energy market.

The April adjustment raised diesel by Tk15, petrol by Tk19, octane by Tk20 and kerosene by Tk18. Prices became Tk115, Tk135, Tk140 and Tk130 respectively.

In June, the government raised petrol, octane and kerosene by another Tk5 a litre, while keeping diesel unchanged at Tk115. Petrol therefore reached Tk140, octane Tk145 and kerosene Tk135.

The government kept those rates unchanged in September – until Sunday's announcement.

WHAT DOES THE GOVT SAY?

According to the energy ministry, international fuel prices have more than doubled since March, while freight charges have also risen sharply because of instability in the Middle East.

BPC incurred losses of approximately Tk22,875.66 crore between March and August, according to the government.

That works out to an average loss of roughly Tk3,813 crore a month during the six months.

Earlier this month, Energy Minister Iqbal Hasan Mahmud had said BPC was losing around Tk83 crore every day, with losses reaching Tk20,060 crore in the first five months after the international price shock.

The government estimates that the latest adjustment could reduce BPC's annual losses by around Tk10,000 crore.

The price hike came as part of the government’s attempts to address this issue.