Lifeline Fuel Arrives via Friendship Pipeline
The shipment arrived through the India-Bangladesh Friendship Pipeline from Assam's Numaligarh Refinery, fulfilling part of a 180,000-tonne annual agreement confirmed by Bangladesh Petroleum Corporation Chairman Muhammad Rezanur Rahman. Bangladesh's deepening fuel crisis, worsened by global oil price spikes triggered by the ongoing US-Israel war with Iran, has led to vehicle rationing at petrol stations, mobile courts deployed against hoarding, and early university closures as authorities seek to conserve power.
The India-Bangladesh Friendship Pipeline
The India-Bangladesh Friendship Pipeline, inaugurated in 2023, runs 131 kilometres from Numaligarh Refinery Limited in Assam's Golaghat district to the Parbatipur oil depot in Dinajpur, Bangladesh. The pipeline has a capacity to deliver 1 million tonnes of High Speed Diesel per year and is the first cross-border petroleum pipeline in South Asia. The project, jointly financed by both governments, was hailed as a landmark in regional energy cooperation.
Under the current agreement, Bangladesh is to receive 180,000 tonnes of diesel in FY 2025-26. The latest shipment forms part of this annual allocation. BPC Chairman Rahman said the consignment would "provide temporary relief" but acknowledged that global oil prices remained "extremely volatile" due to Middle East hostilities.
The Crisis Deepens
Bangladesh imported approximately 5 million tonnes of petroleum products in 2025, making it heavily exposed to international price movements. With Brent crude surging from $73/barrel in late February to peaks above $120/barrel in the first week of March following Iran's threats to block the Strait of Hormuz, Bangladesh's import bill has soared. The country's foreign exchange reserves, already under pressure, fell to $18.4 billion — barely four months of import cover — according to Bangladesh Bank data.
Fuel shortages are most acute in rural areas and among the transportation sector. Truck and bus operators in Dhaka, Chattogram, and Sylhet reported diesel allocations cut by 30% to 50% from normal levels. Garment factories — which account for 84% of Bangladesh's export earnings — are running backup generators at elevated cost, squeezing margins at a critical time for the sector.
Emergency Measures
The Bangladesh government has invoked the Essential Services Ordinance to prioritise diesel allocation to agricultural water pumps ahead of the Boro rice planting season, a critical food security measure. Mobile courts have been empowered to fine and imprison hoarders and black-market fuel sellers. At least 47 individuals have been arrested under emergency fuel hoarding provisions since March 5.
Universities in Dhaka and several major cities have been asked to advance their summer vacation schedules by two weeks to reduce electricity and transportation demand, a move that drew protests from student groups.
India's Response
India's Petroleum Minister confirmed that domestic diesel stocks are "more than adequate" and that New Delhi is reviewing Bangladesh's request for an additional 50,000 tonnes beyond the annual agreement. Officials cited the need to balance bilateral goodwill with domestic price management obligations. India's own fuel prices have risen sharply — diesel at the pump is now ₹108/litre nationally — but the government has so far resisted calls to cut excise duty.
The supply relationship exists despite ongoing diplomatic tensions, including social media criticism in Bangladesh over alleged violence against Hindu minorities in recent months. Energy trade, both governments emphasised, would continue on commercial terms irrespective of political friction.
Regional Energy Outlook
The broader South Asian energy outlook has deteriorated sharply since the Iran conflict escalated. Sri Lanka, Nepal, and Pakistan are also grappling with elevated import costs. The Asian Development Bank estimates that every $10/barrel sustained increase in oil prices reduces South Asia's aggregate GDP growth by 0.3–0.5 percentage points — implying a potential 1.2–2.0 point hit if current prices persist through mid-2026.
