Bangladesh’s Fuel Import Bill More Than Doubles

Bangladesh’s spending on petroleum imports more than doubled in the 2025–26 financial year, driven by higher international energy prices and increased demand amid renewed instability in the Middle East.

According to Bangladesh Bank data, the country spent around US$10.64 billion on petroleum products during the financial year, compared with less than US$5.14 billion in 2024–25. The increase was about US$5.5 billion, representing a rise of roughly 107 per cent in a single year.

The surge in fuel costs also played a major role in pushing up Bangladesh’s overall import bill. Total import expenditure reached US$75.24 billion in 2025–26, up from US$68.35 billion the previous year. This represents an increase of US$6.89 billion, or 10.07 per cent.

Fuel imports accounted for the largest share of that additional expenditure. The sharp rise has added pressure to the country’s foreign exchange requirements at a time when Bangladesh remains heavily dependent on imported petroleum to meet transport, industrial and power-sector needs.

Refined petroleum products accounted for most of the increase. Bangladesh spent US$9.44 billion on refined fuel imports in 2025–26, compared with US$4.51 billion a year earlier. The expenditure therefore rose by more than 109 per cent.

Spending on crude oil also increased substantially. Imports of crude petroleum cost US$1.20 billion during the latest financial year, up from US$620 million in 2024–25. That represents an increase of around 92 per cent.

The latest figure marks the highest annual expenditure on fuel imports recorded so far. Before this, Bangladesh’s previous peak was recorded in 2021–22, when the combined effects of the Covid-19 pandemic and the Russia-Ukraine war pushed fuel import expenditure to US$7.99 billion. The figure subsequently fell to US$5.77 billion in 2022–23 before rising again to US$6.13 billion in 2023–24.

The pressure intensified towards the end of the latest financial year. In June alone, Bangladesh spent US$1.6033 billion on fuel imports. By comparison, the average monthly expenditure across the 12 months of 2025–26 was around US$886.2 million. The June figure was therefore considerably higher than the annual monthly average.

The increase in fuel costs is also being felt across the domestic economy. Higher energy and transport expenses have raised production costs for many industries, while disruptions in fuel availability have affected operations in some cases. Such increases can feed into the prices of goods and services, adding to the pressure created by already high inflation.

The rise in petroleum expenditure, however, has not been matched by higher import spending across every category. Bangladesh spent US$5.03 billion on a range of consumer goods, including edible oil, sugar, pulses, spices, milk and cream, during the latest financial year. That was about US$350 million, or 11.40 per cent, lower than the US$5.68 billion spent in the previous year.

Rice imports also became cheaper in terms of total expenditure. Spending on rice imports fell by around 22.5 per cent to less than US$530 million, from more than US$680 million a year earlier. Wheat imports followed the opposite trend, with expenditure rising by 26.10 per cent to US$2.05 billion from US$1.62 billion.

The country’s foreign exchange position has improved despite the heavier import burden. A Bangladesh Bank official said the exchange rate of the US dollar had remained between Tk122 and Tk124 for an extended period, while access to dollars had also become easier, largely because of stronger remittance inflows.

The official suggested that the foreign exchange reserves could have increased further had international market conditions been less challenging. On Monday, Bangladesh’s gross foreign exchange reserves stood at US$37.24 billion, while reserves calculated under the International Monetary Fund’s BPM6 methodology stood at US$32.44 billion.

Bangladesh’s reserves had fallen significantly in previous years, reaching US$20.48 billion around the time of the change of government in August 2024. The country had previously recorded reserves of more than US$48 billion in August 2021. The subsequent decline was attributed to several factors, including increased pressure from illicit financial outflows and wider balance-of-payments difficulties.

Import trends in other sectors also offer a mixed picture. Imports of products related to the ready-made garment industry declined by around 4 per cent to US$17.70 billion during 2025–26. Imports of other intermediate goods, meanwhile, rose by nearly 9 per cent to US$19.35 billion.

Capital machinery imports increased by more than 7 per cent to US$10.23 billion, while imports classified under other categories rose by more than 3 per cent to US$9.71 billion. The increase in capital goods imports suggests that some demand for productive equipment remained, although wider investment activity has yet to regain the momentum expected by businesses and policymakers.

Bankers say weak investment demand is being constrained by several factors, including shortages of gas and electricity, high interest rates and concerns over the law-and-order environment. Private-sector credit growth has consequently fallen to 4.47 per cent, its lowest level on record.

The relatively comfortable position in the foreign exchange market is being supported by strong remittance inflows, subdued investment demand and tighter measures against money laundering and capital flight. Bankers argue that maintaining this stability will require sustained growth in both remittances and export earnings.

For Bangladesh, the latest fuel import figures underline the vulnerability created by heavy dependence on international energy markets. A sharp rise in global oil prices can quickly increase the country’s import bill, put pressure on foreign exchange resources and raise production and transport costs at home.

The challenge, therefore, extends beyond managing the immediate cost of fuel. Sustained export growth, stronger remittance inflows, greater private investment and effective measures to prevent illicit financial outflows will remain important for maintaining external stability while creating the conditions needed for higher employment and economic growth.