Bangladesh’s petroleum import bills are rising sharply as the Middle East conflict drives up global oil and gas prices, increasing pressure on the country’s energy import costs.
Letters of credit opened for petroleum and petroleum product imports surged around 63 per cent year-on-year to $3.7 billion in the July–September quarter of the current financial year, up from $2.28 billion a year earlier, according to Bangladesh Bank.
The increase reflects a steep rise in energy prices as the conflict disrupts supplies, forcing Bangladesh to spend more on imported fuel and liquefied natural gas (LNG).
Import letters of credit for crude oil tripled to around $630 million from more than $200 million a year earlier, while those for other petroleum products, including gas, more than doubled to $2.4 billion from $1.12 billion.
The rise was also reflected in actual payments. Settlements of petroleum import letters of credit increased 26 per cent year-on-year to $2.93 billion during the quarter.
Global benchmark Brent crude averaged $97 a barrel in July–September, up more than 40 per cent from $69 a year earlier, according to World Bank commodity price data.
The average price of LNG in Japan rose to $14.45 per million British thermal units from $11.73 over the same period.
Bangladesh is particularly exposed to rising gas prices because it meets more than one-third of its natural gas demand through imports.
Following QatarEnergy’s declaration of force majeure, the country has increasingly turned to the spot market to secure LNG supplies.
Spot LNG prices have climbed to around $30 per million British thermal units, nearly three times the level typically paid before the Middle East conflict, adding to the country’s energy budget pressures.
Bangladesh also requires more than 68 lakh tonnes of petroleum annually, with diesel accounting for over two-thirds of demand.
The surge in import credit openings signals a larger financial commitment to energy purchases, although the figures do not establish a corresponding increase in the physical volume of fuel imported.
With global prices elevated and spot LNG significantly more expensive, Bangladesh faces mounting costs to maintain its oil and gas supplies.
