Singapore does not produce its own fuel oil. It imports crude oil and exports refined products to various countries at relatively high prices. Bangladesh imports large volumes of refined fuel each year from several Singapore-based companies, pushing up costs. Consumers gain little, even as global oil prices and shipping premiums drop.
Like Bangladesh, Indonesia also imports fuel from Singapore. But in mid-2024, it announced a plan to gradually cut those imports to ease the burden of higher Singapore prices. Indonesia has traditionally relied on Singapore because of its proximity. But it now wants to lower domestic fuel prices and cut dependence on Singapore suppliers.
Bangladesh sources refined fuel from several Singapore-based firms such as Gunvor, Vitol Asia, Aramco Trading, and Unipec. Vitol Group operates globally from Switzerland, while its Asia-Pacific arm, Vitol Asia, is headquartered in Singapore.
Between August 2024 and July 2025, four state-owned companies imported $2.78 billion worth of fuel from Singapore: Meghna Petroleum $1.02 billion; Padma Oil $968.8 million; Jamuna Oil $649.5 million; and Eastern Refinery $144.9 million. Bangladesh Petroleum Corporation (BPC) makes substantial annual profits selling this fuel domestically.
Vitol Asia, a key supplier to Bangladesh, is part of Vitol Inc., a company that has faced repeated allegations of bribery and misconduct in several countries. It admitted to paying bribes to officials in Brazil, Ecuador, and Mexico between 2005 and 2014 to gain favourable terms in oil trade. In December 2020, the company paid a $135 million criminal penalty to settle a case with U.S. Department of Justice and paid more than $16 million to the Commodity Futures Trading Commission, bringing the total to over $160 million.
Vitol also faced accusations in Brazil of paying millions of dollars in bribes to obtain confidential information and favourable contracts from Petrobras. It was further accused of trying to influence benchmark prices in fuel markets. Sri Lanka blacklisted Vitol in 2021 over alleged irregularities in its petroleum supplies.
Under Awami League government, Vitol Asia emerged as a major supplier to BPC and Petrobangla. It also handled much of Bangladesh’s LNG imports. Allegations circulated at the time regarding Vitol’s close ties with Nasrul Hamid Bipu, then-state minister for power and energy.
On November 24, the government’s procurement committee approved importing 1.42 million metric tons of fuel oil from Singapore at BDT 109.79 billion. Vitol Asia is one of the key suppliers.
Several analysts describe Bangladesh’s reliance on Singapore, bypassing oil producing countries, as a form of “Singaporephilia”, using the suffix “philia” to describe an unusual attachment to something. Even though Singapore is not an oil producing country itself, Bangladesh continues to buy refined fuel from it at higher prices.
China was Bangladesh’s top supplier of refined fuel in 2023. It exported about $2.96 billion in fuel to Bangladesh that year, most of it under government-to-government arrangements. Industry officials at that time said China’s share in Bangladesh’s fuel imports was rising rapidly. That trend has since reversed as dependence on Singapore has narrowed Bangladesh’s supply sources.
BPC has also faced allegations of irregularities in its accounts. The IMF previously urged Bangladesh to appoint an international firm to audit the corporation. But successive governments showed little interest. Awami League government did not conduct any such audit, and now the current interim government has continued along the same path.
Energy specialists warn that consumers lose out as Bangladesh pays high prices for Singapore fuel while BPC faces internal irregularity allegations. Together, they argue, these factors prevent global price drops from reaching the domestic market.
Global crude prices fell more than 24 percent over the past year, and tanker freight premiums dropped 9 percent. Yet domestic fuel prices rose, ignoring the decline in oil and shipping costs. On November 30, the government raised diesel, kerosene, petrol, and octane prices by BDT 2 per litre for December. However, domestic prices should fall when global prices drop under automatic pricing formula. Energy specialists and industry officials say interim government has prioritised BPC’s profits rather than easing pressure on consumers. They argue that the current administration is following the pattern set by the ousted Awami League government, which kept fuel prices high for years despite repeated criticism.
Energy specialists say the increase is inconsistent with the automatic formula which is intended to pass on global declines to consumers. They note that domestic prices are rising instead. Although this allows BPC to protect its margins, households absorb the burden. Several experts believe BPC’s profit and loss accounts should be audited by an international firm.
BPC, however, says it cannot adjust prices based on crude alone because Bangladesh lacks adequate refining capacity and relies heavily on imported refined fuel. Those shipments involve additional costs for freight, insurance, service charges, duties, and VAT.
BPC Chairman Amin Ul Ahsan told Bonik Barta that crude accounts for only about 20 percent of Bangladesh’s fuel imports. “The remaining 80 percent is refined fuel,” he said.
“Global discussions focus on crude, but prices for refined fuel remain high and that is the dominant factor. Bringing fuel from two sources involves freight, duties, taxes, service charges, currency depreciation, and lightering costs. Once these are added to the tariff, the figures may look high, but they are not excessive. It is incorrect to say BPC is overcharging. BPC earned BDT 45 billion in profit in the last financial year (FY 2024-25). That money will go into BPC’s development projects. Refinery will be set up. That expansion requires significant spending. The corporation is investing in storage, pipelines and other infrastructure, so it is not simply holding on to cash.” — Md Amin Ul Ahsan, chairman of Bangladesh Petroleum Corporation
Bangladesh’s annual demand for fuel stands at roughly 6.8 to 7 million tonnes. Almost all of it comes from international markets. About 1.5 million tonnes arrive as crude oil, which Eastern Refinery processes before three BPC companies distribute it nationwide. Crude prices in global markets have fallen 24.15 percent over the past year, based on movements between January 15 and December 3. BPC argues that refined fuel prices have not dropped in the same way, so the average cost of crude and refined imports has not shifted significantly. Energy specialists counter that Bangladesh has overlooked cheaper sources and continues to import refined fuel from Singapore at higher prices, leaving consumers without relief.
Shipping premiums for large fuel consignments have also fallen 9.13 percent over past six months. Product-by-product data show a sharper decline in several categories. Diesel import premiums have dropped 45.6 percent per barrel. Jet fuel is down 9.2 percent. Octane has fallen 12.31 percent. Marine fuel is down 3.98 percent per tonne. Furnace oil has dropped 9.92 percent. Diesel premiums averaged $8.75 per barrel in first half (January-June) of 2025. They now stand at $4.76. Import premiums for Jet A-1, fuel for airplanes, have eased from $7.32 to $6.66 per barrel. Octane premium has moved from $5.93 to $5.20. Marine fuel premiums were $72.90 per tonne in the first half of 2025 and now stand at $70. Furnace oil premiums have dropped from $44.68 to $40.25 per tonne. Premiums for 2026’s first half are expected to fall further.
BPC says cost cut in import premiums reached BDT 7.6 billion in this year’s first half through government-to-government contracts and international tenders. G2G deals saved around BDT 3.9 billion in six months. International tenders saved around BDT 3.7 billion in the same period. Despite these gains, consumers have not seen meaningful changes in domestic pump prices. Transport fares have not fallen either.
BPC officials say global price changes take time to filter through. Fuel markets swing sharply and shipments take about a month to reach Bangladesh. Latest price adjustment, officials say, was calculated using average prices between October 21 and November 20. The automatic pricing formula does not allow immediate adjustments against current global rates.
BPC bases most fuel purchases on PLATTS prices for Singapore-based fuel products. The purchase price is calculated using a five-day average—covering the loading day, the two days before, and the two days after. A premium is then added, covering shipping, insurance, operational, and administrative costs. This premium is set for a six-month period.
Diesel accounts for roughly 70 percent of the country’s fuel imports and is known internationally as gas oil. In the first half of 2025, the diesel premium fell by half. Industry sources say global prices for both refined and crude diesel have declined. Yet, domestic prices have barely reflected this change over the past year. Instead, government has kept prices high, generating substantial revenue through BPC. Reducing fuel costs would lower state revenue.
Analysis of BPC’s financial reports shows the corporation contributes significant revenue to the government through fuel sales. Duties and taxes on fuel generate roughly BDT 150 billion annually. For FY 2023–24, government received BDT 146.48 billion from duties and taxes. Estimates suggest at least BDT 150 billion will be collected in revenue from BPC in FY 2024–25.
BPC has earned enormous profits from domestic fuel sales. Between FY 2014–15 and 2024–25, it recorded nearly BDT 590 billion in profit. Over the last three fiscal years alone, it earned BDT 128.44 billion, including BDT 43.15 billion in FY 2024–25, BDT 39.43 billion in FY 2023–24, and BDT 45.86 billion in FY 2022–23.
Experts say BPC has effectively become a commercial enterprise, prioritising profits over consumer interests.
“BPC records no losses from petrol or octane sales. They claim losses in diesel, but consumers have no way of verifying that. Looking at year-end financial statements, it is clear they didn’t incur losses from fuel sales. The Energy Division issues a pricing formula. Domestic fuel prices are set based on that. But it remains unclear whether it prioritises consumer savings. For transparency, BPC’s pricing formula could be reviewed in an BERC public hearing. That way, consumers could see the exact costs of each product, similar to the LPG pricing process.” — Professor M Tamim, energy expert
Professor M Tamim added that transparent pricing could allow fuel costs to fall. “Although BPC gained high profits over the years, consumer interests are being neglected,” he said.
BPC operates in fuel oil as a state-owned entity. Every year, it estimates losing revenue from buying and selling oil. Yet the corporation ultimately records large profits. The Consumers Association of Bangladesh (CAB) argues that public funds warrant full transparency.
CAB’s Energy Adviser M Shamsul Alam told Bonik Barta, “We already called for an international audit of BPC’s revenues and expenditures a decade ago. Unfortunately, it has never happened. Such a review could have transformed BPC into a service-oriented entity. Instead, it has become a commercial enterprise. Globally, governments provide services, not profit. Here, however, the state collects billions annually through duties and taxes.”