BPC seeks fuel stabilisation fund, measures to ensure supply security

The Bangladesh Petroleum Corporation (BPC) has proposed establishing a fuel stabilisation fund, enhancing domestic refining capacity, and increasing the government's share in the LPG sector to ensure uninterrupted petroleum supply at affordable prices amid volatile global energy markets.

The proposals came at the first meeting of the Parliamentary Standing Committee on Public Undertakings, where the state-owned corporation presented its operational challenges, rising import costs, fuel pricing issues and plans to strengthen national energy security.

Talking to BSS, Petrobangla Chairman Md Abdul Mannan Patwary said, "We will have to increase our fuel oil reserve otherwise we won't be able to cope with any emerging situation." 

To meet growing demand, the government also needs to increase fuel storage capacity, he added.
BPC sources said that rising petroleum prices driven by global conflicts had pushed the corporation into losses since March 2026. 

It sought necessary financial assistance to keep fuel prices affordable and proposed modernising its supply chain, expediting the commissioning of the Single Point Mooring (SPM) system, and developing a time-bound plan to expand storage capacity. 

Talking to BSS, BPC Chairman Dr Md Rafiqul Islam said the issue of rolling out Fuel Stabilization Fund is still at the conceptual stage as its modalities are yet to be finalized.

"The government is doing necessary groundwork over the matter...if such kind of fund can be created, we'll be able to utilize it in any kind of unexpected situation," he said.

On boosting the fuel capacity storage, Rafiqul said they are also working on the issue to raise such storage capacity further to three months.

When asked about the modernization initiative of Single Point Mooring (SPM) system, the BPC Chairman said the Notification of Award has been accepted while the contract would be signed in this regard with the awarded firm within 28 days.

The standing committee meeting suggested that the relevant authorities should formulate and present a realistic plan to keep fuel prices at an affordable level for the people.

The committee also recommended that detailed information on current fuel demand, storage capacity and the preparedness of the concerned institutions to meet future demand be presented at its next meeting.

According to the BPC, the government adjusted diesel price by Tk 20 per litre that brought the retail price to Tk 135 due to huge losses.

BPC said it could break even on diesel when the Platts benchmark price stood at US$110 per barrel. However, the average benchmark price reached US$165.82 per barrel during September 1-23, 2026.

The corporation estimated its diesel loss at Tk 54.62 per litre and projected losses of around Tk 840 million a day, Tk 25 billion a month and Tk 300 billion a year at the prevailing market conditions.

BPC said the government needed to provide financial support to help it supply fuel at affordable prices. It also proposed a Fuel Stabilisation Fund to help manage price volatility and strengthen the financial sustainability of the fuel supply system.

BPC identified the rapid commissioning of the Single Point Mooring (SPM) as a key priority to reduce the time and costs associated with receiving petroleum products from mother vessels.

The corporation said the existing process of receiving imported fuel involved considerable expenditure and time. The SPM infrastructure, together with its pumping stations and tank farm, would help improve the efficiency of unloading imported crude oil and petroleum products.

BPC also proposed increasing domestic refining capacity to reduce import dependence, expanding the pipeline network and accelerating depot automation.

The corporation operates through its subsidiary companies, including Eastern Refinery PLC, the three petroleum marketing companies-Padma Oil PLC, Meghna Petroleum PLC and Jamuna Oil PLC-and other entities involved in fuel transportation, LPG bottling and lubricant blending.

BPC also proposed increasing strategic fuel storage capacity to cover 90 days of demand to establish an adequate buffer stock and strengthen the country's supply security.

It called for a time-bound action plan to achieve the target. The corporation also proposed strengthening strategic storage infrastructure and modernising the nationwide petroleum distribution network.

BPC operates 29 depots across the country, including railhead and river-based facilities. The network supports the distribution of petroleum products to different regions and sectors of the economy.

The proposed expansion of storage capacity would help the country maintain a stronger reserve against international supply disruptions.

BPC identified manual systems for receiving, storing and distributing petroleum products as major institutional challenges. It proposed automating and modernising the supply network to improve operational efficiency, reduce delays and strengthen accountability.

Other priorities include establishing an efficient and accountable fuel supply framework, expanding the use of pipelines and increasing the government's share in the LPG sector.

The corporation also proposed increasing domestic refining capacity and improving the overall management of fuel imports, storage and distribution.

The BPC outlined the existing framework for petroleum price determination. The energy and mineral resources division determines retail prices for diesel, octane, petrol and kerosene, while the Bangladesh Energy Regulatory Commission determines prices for certain other petroleum products, including furnace oil, LPG and jet fuel. BPC determines prices for products such as bitumen and SBPAs.

The government introduced an automatic fuel pricing mechanism in March 2024 to adjust domestic prices in line with international market movements.

However, the corporation did not fully adjust domestic prices in line with its proposed rates during the sharp international price increases in 2026, contributing to its financial losses.�"BSS