Bangladesh’s flagship fuel infrastructure projects are struggling to deliver on promises of efficiency and cost savings, raising concerns over governance and accountability despite huge investments.
Nearly Tk12,000 crore has been spent over the past decade on two major initiatives – the Maheshkhali Single Point Mooring (SPM) and the Dhaka-Chattogram pipeline – aimed at modernising a system long criticised for delays, high costs and losses.
Both projects were designed to cut expenses, speed up fuel delivery and reduce theft. Officials projected combined annual savings of more than Tk1,000 crore.
However, much of those gains remain unrealised, as the SPM project has yet to deliver any benefits and the pipeline continues to operate well below capacity.
Experts say that, as the country grapples with an energy crisis amid the ongoing Middle East conflict, the infrastructure could provide vital breathing space for energy security if fully operational.
The SPM facility, seen as a cornerstone of the overhaul, highlights the gap between planning and execution.
Built with Chinese financial and technical support at a cost of Tk8,341 crore, the offshore terminal allows large tankers to unload fuel directly at sea within 48 hours, compared with up to 11 days under the traditional lightering system.
The facility can handle up to 9 million tonnes of fuel annually and is connected to the Eastern Refinery through a 110-kilometre dual pipeline. Bangladesh consumes about 7 to 7.5 million tonnes of fuel oil each year, making the project central to improving energy security.
Yet more than a year after its commissioning in March 2024, the terminal remains unused.
Officials say the problem lies not in infrastructure but in operations.
The Bangladesh Petroleum Corporation (BPC) has so far failed to appoint an experienced operator for the technically complex offshore system, with multiple tenders falling short of requirements. As a result, expected annual savings of around Tk800 crore have yet to materialise.
A fresh tender has been issued to bring the facility into full operation, according to Petroleum Transmission Company Limited Deputy General Manager for Planning and Operations Zaman Nahid Raihan.
He said no local company has the expertise to run such a system, meaning Bangladesh will likely depend on an international operator.
At the policy level, uncertainty remains.
The Ministry of Energy has not set a clear deadline for appointing the operator, though officials say the process is under review due to the project’s technical complexity.
Ministry Joint Secretary Morsheda Ferdous said the selection process is being scrutinised carefully. “We aim to complete this process as quickly as possible,” she said.
SPM faces limits as refinery expansion lags
Even if brought fully operational now, the SPM project would struggle to operate at its intended capacity, officials say, as delays in expanding refining capacity continue to constrain its use.
The offshore facility is designed to handle up to 9 million tonnes of crude oil a year. But its effectiveness is closely tied to the capacity of Eastern Refinery Limited (ERL), which remains limited.
At present, ERL can process about 1.5 million tonnes annually, while the system feeding it is capable of supplying up to 4.5 million tonnes. The result is a gap of roughly 3 million tonnes in processing capacity.
That imbalance leaves much of the pipeline infrastructure underused, forcing Bangladesh to continue relying on imported refined fuel, which is typically more expensive.
The issue centres on delays to ERL Unit-2, a long-planned expansion intended to add 3 million tonnes of crude processing capacity and significantly reduce dependence on imports.
The project has been under development for more than 15 years, with costs rising to Tk35,465 crore.
Officials say the completion timeline has now been pushed back to 2030.
Until the new unit becomes operational, the SPM is expected to function well below its potential, limiting the benefits of one of the country’s most significant fuel infrastructure investments.
Pipeline disruptions hinder expected gains
A similar pattern has emerged in the Dhaka-Chattogram pipeline, where early technical issues have limited operations despite the project’s completion.
The 250-kilometre pipeline, commissioned in August 2025 at a cost of Tk3,653 crore, was designed to replace slower and loss-prone road and river transport. It aimed to cut delivery time from 48 hours to 12 and reduce system losses from 0.17 per cent to 0.05 per cent.
But initial operations were disrupted by technical problems.
Officials reported discrepancies during trial runs, along with concerns over fuel losses, prompting a suspension of regular operations shortly after commissioning.
Since then, the pipeline has operated only intermittently.
Engineers are still working to resolve issues related to calibration, pressure, temperature control and overall system integration.
Zaman Nahid Raihan said the pipeline is currently running at a limited level.
He said work is ongoing to fix the faults identified during commissioning, but could not say when full operations would begin.
Delays strain public finances
The financial impact of the delays is becoming increasingly clear, as Bangladesh faces a growing fuel import bill and mounting pressure on public finances.
Officials say the country’s fuel import costs are set to rise by billions of dollars annually, while domestic prices remain heavily subsidised. In that context, the failure to fully utilise cost-saving infrastructure is adding to the fiscal burden.
Losses elsewhere in the energy system are also contributing to the strain.
Systemic inefficiencies in gas distribution, for example, continue to drain crores of taka each year, pointing to wider structural challenges across the sector.
Analysts say the problems extend beyond technical setbacks.
They point to deeper institutional weaknesses, including governance gaps, limited accountability and a high degree of bureaucratic control.
Energy expert Professor Shamsul Alam said the issues are structural rather than purely operational.
“Without greater autonomy for sector institutions and a clear accountability framework, even the most advanced infrastructure risks underperformance,” he said.
He added that the prolonged delays merit closer scrutiny, including whether mismanagement or corruption may have played a role.
