Diesel Imports Diversify, India Remains Key Supplier

Bangladesh’s diesel import landscape has undergone a remarkable transformation over the past two decades. While the country once relied almost exclusively on Middle Eastern suppliers—particularly Kuwait—today the supply chain is far more diversified, with South-East Asian nations and India playing increasingly significant roles.

Historical Dependence on the Middle East

In the 2006–07 fiscal year, 91% of diesel imported by the state-run Bangladesh Petroleum Corporation (BPC) originated from Kuwait, while India’s share was only 9%, according to data from the National Board of Revenue (NBR). At that time, the bulk of imports were carried out under government-to-government (G2G) agreements, ensuring a relatively stable but geographically concentrated supply.

Emergence of New Suppliers

Over the following decade, the import profile shifted markedly. Singapore rapidly rose through the ranks to become the leading supplier, while countries such as Malaysia, China, the United Arab Emirates, and Saudi Arabia also entered the market. This diversification has reduced Bangladesh’s dependence on Middle Eastern producers and expanded its sourcing options through competitive international tenders, which now account for approximately 50% of imports.

Current Import Landscape

In the first eight months of the current fiscal year (July–February), Bangladesh imported around 2.3 million tonnes of diesel. Singapore supplied 41% of this volume, while Malaysia contributed 24%, underscoring the significant role of South-East Asian nations. India remains a steady partner, although its share fluctuates year by year.

Diesel Import by Country (July–February, Current Fiscal Year)

The NBR reports that diesel accounts for roughly 63% of Bangladesh’s total fuel consumption. In 2024–25, the country’s diesel demand was approximately 4.35 million tonnes, largely met through imports, while domestic refineries supplied about 0.7–0.75 million tonnes from crude processing.

India’s Steady Contribution

India’s contribution to Bangladesh’s diesel imports has remained significant despite fluctuations. In 2023–24, imports from India peaked at approximately 551,000 tonnes, representing 15% of total imports. In the last fiscal year, the figure declined to around 448,000 tonnes, while in the first eight months of the current fiscal year, imports stood at 333,000 tonnes. Indian suppliers include state-owned Indian Oil Corporation Limited and other private companies.

A strategic infrastructure project—the Bangladesh–India Maitree Pipeline—facilitates smooth diesel transport from India’s Numaligarh Refinery to the Parbatipur depot in Dinajpur. Commissioned in December 2022, this 130-kilometre pipeline enables shipments to reach Bangladesh within two days, with an annual capacity of approximately 180,000 tonnes.

Reduced Supply Risk through Diversification

The broadening of import sources has significantly mitigated supply risks. Previously, heavy reliance on the Middle East meant that instability in the Hormuz Strait could disrupt fuel availability. Today, Bangladesh imports diesel from Singapore, Malaysia, China, Indonesia, India, and soon Brunei and the United States, ensuring alternative supply routes in the event of regional disruption.

“Diesel imports now come from a diverse set of sources, combining G2G agreements with competitive tenders,” said Anindya Islam, State Minister for Power, Energy, and Mineral Resources. “This reduces the likelihood of major supply crises. The pipeline from Numaligarh makes Indian diesel readily accessible, and we are initiating imports of 120,000 tonnes from Brunei, with potential future imports from the United States. This will further enhance supply diversity.”

Strategic Importance of Diesel

Diesel remains the country’s most widely used fuel, powering buses, trucks, pickups, and goods vehicles, as well as irrigation pumps in agriculture, engine-powered riverine vessels, industrial generators, and even some power plants during electricity shortages. Approximately 24% of diesel consumption is accounted for by the agricultural sector alone, highlighting the fuel’s critical role across transport, agriculture, industry, and power generation.