Ministry gives BPC 4 days to privatise fuel import – experts question haste

Infograph: TBS

The Ministry of Power, Energy and Mineral Resources has directed the Bangladesh Petroleum Corporation (BPC) to draft within four days a policy allowing private companies to import, store, transport, distribute and market refined petroleum products, a move that could fundamentally reshape Bangladesh's downstream fuel sector.

The directive has drawn criticism from energy experts, who argue that such a significant reform requires extensive consultation, technical studies and careful assessment of its implications for energy security and market regulation.

In a letter issued on Thursday, the Energy and Mineral Resources Division instructed the BPC to submit the draft Private Sector Refined Fuel Import, Storage, Transportation, Distribution and Marketing Policy 2026 by 10 August.

The order comes as the BPC operates without a full-time chairman after Rezanur Rahman was made an officer on special duty (OSD) on 26 July.

With Friday and Saturday being weekly holidays, the corporation effectively has only two working days to prepare the draft. Senior officials are also occupied with preparations for the prime minister's scheduled visit to the Matarbari energy hub on 9 August.

The ministry's letter, signed by Senior Assistant Secretary Asif Ahmed, says the proposed policy aims to create a framework for private participation in refined fuel imports and marketing to ensure uninterrupted fuel supplies.

Recommendation against private entry

The directive follows an 11-member BPC committee's review of an application from a leading local conglomerate seeking permission to import and market refined petroleum products.

Officials familiar with the matter said the committee submitted its report to the ministry on 21 July, recommending against opening the sector to private operators.

Five days later, BPC Chairman Rezanur Rahman was removed from his post and made an OSD.

The Business Standard could not independently verify whether the committee's recommendation and the chairman's removal were connected.

Several BPC and Energy Division officials, however, said the latest directive has created unease within the corporation, particularly in the absence of permanent leadership.

BPC Director (Planning) Muhammad Asadul Haque told TBS he had heard about the ministry's instruction but had yet to receive the letter.

"There are currently three directors at the BPC, and it has not yet been decided who will be tasked with drafting the policy," he added.

Experts question timeline

Former Buet professor and energy expert M Tamim said private participation in refined fuel imports could be considered but only after a comprehensive assessment of its regulatory, commercial and fiscal implications.

He questioned whether such a policy could realistically be drafted within four days.

"There are many issues that require careful examination," he said, citing the need for a clear framework on pricing, competition, market access and distribution if both public and private operators are allowed.

Tamim also said fuel subsidies remain a major challenge because domestic fuel prices are not fully market-based.

"If subsidies continue, the government must determine whether private operators will also receive them and under what mechanism," he said, noting that countries such as India have established systems for this.

He added that while private companies can already participate in fuel imports under existing arrangements, creating a parallel marketing and distribution network would take considerable time.

"The import issue is one thing, but marketing is another. The existing distribution system has evolved over many years. A new system for private operators cannot be built overnight."

M Shamsul Alam, energy adviser to the Consumers Association of Bangladesh (CAB), said any expansion of private participation should first be backed by a strong regulatory framework to protect consumers and safeguard national interests.

He said strategic fuel infrastructure should remain under effective state oversight.

Former Eastern Refinery General Manager Monjar-e-Khorshed Alam called the four-day deadline unrealistic.

"Governments often set short deadlines, but those are frequently extended. It is hardly possible to formulate such a policy in just four days," he said, adding that opening the sector amid continued global fuel market volatility may not be prudent.

Economist Anu Muhammad, president of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports, also opposed the proposal.

He argued that the government should strengthen state institutions responsible for fuel imports and distribution instead of increasing reliance on private companies, warning that greater dependence on private importers could concentrate control of fuel supplies in the hands of a few large business groups.

Experts also said any liberalisation should be preceded by transparent regulations, clear accountability mechanisms and effective oversight to ensure fair competition and protect Bangladesh's long-term energy security.