Category: Energy and Power

Mirana Mahrukh, Additional Secretary of the Economic Relations Division (ERD), has been appointed as the new Secretary of the Power Division.

the appointment was announced in a noti?cation issued recently by the Senior Appointments Wing1 of the Ministry of Public Administration. The order, signed by Senior Assistant Secretary Jeti Pru on behalf of the President, stated that the appointment would take immediate effect in the public interest. Mirana Mahrukh is a member of the 18th batch of the Bangladesh Civil Service (BCS). She obtained both her bachelor’s and master’s degrees in Public Administration from University of Dhaka and later earned an MBA from Victoria University in Melbourne. During her career, she served in various positions in ?eld administration and government ministries.

Bangladesh does not yet have suf?cient geological evidence to conclusively classify its offshore territory in the Bay of Bengal as a hydrocarbon-rich province by global standards. However, the geological and geophysical data already available should be systematically analyzed, reprocessed, and packaged to present a compelling investment case to international oil companies (IOCs). At the same time, policymakers must recognize that offshore oil and gas exploration is a capital-intensive, highrisk undertaking that requires advanced technology, specialized expertise, and substantial ?nancial resources.

as a result, there is no realistic alternative to attracting foreign investment and international expertise if Bangladesh hopes to unlock the hydrocarbon potential of its offshore areas.

in an interview with Mollah Amzad Hossain, Editor of Energy and Power, Professor Dr. Md.

anwar Hossain Bhuiyan, Department of Geology at the University of Dhaka, shared his views on Bangladesh’s Offshore Bidding Round 2026. Bangladesh has formally launched the Offshore Bidding Round 2026 following the ?nalization of the Offshore Model PSC 2026. How do you assess the country’s preparations to attract investment for offshore oil and gas exploration? There is no alternative to exploring, developing, and utilizing domestic energy resources if Bangladesh is to ensure long-term energy security. From that perspective, the launch of the Offshore Bidding Round 2026 is a welcome initiative. However, Bangladesh has fallen signi?cantly behind in offshore exploration.

a bidding round was previously announced in 2024 under a model PSC developed with the support of international consultants.

although seven IOCs purchased bid documents, none submitted bids due largely to the changed political environment at the time.

the Ministry of Power, Energy, and Mineral Resources subsequently reviewed the reasons behind the lack of participation. Based on those ?ndings, Petrobangla updated the Offshore Model PSC 2026. From both ?nancial and technical perspectives, the revised PSC is attractive for investors. However, IOCs do not make highrisk, multi-billion-dollar offshore investments based solely on contractual terms.

a stable economic, social, and political environment is equally important.

in my view, the current government is committed to creating such an environment.

are the changes introduced in the Offshore Model PSC 2026 suf?cient to attract IOCs? The revised PSC is certainly more attractive from both commercial and technical standpoints. Gas pricing has been linked to Brent crude oil prices, while a ?oor and ceiling mechanism has been introduced to provide greater price certainty.

the PSC also allows investors to recover pipeline infrastructure costs and earn wheeling charges after a gas discovery. Furthermore, the WPPF rate has been reduced from 5 percent to 1.5 percent. Despite these improvements, there remains a signi?cant challenge. Major IOCs typically invest in offshore regions where geological evidence suggests the possibility of discovering reserves in the range of 30 to 50 trillion cubic feet (TCF).

at present, there is insuf?cient data to indicate that Bangladesh’s offshore areas contain reserves of that magnitude. Moreover, successful discoveries tend to attract additional investment. Bangladesh lacks such a landmark offshore success story.

therefore, investment risks in the country’s offshore sector remain comparatively high. Petrobangla possesses substantial offshore data, while third-party companies have also conducted 2D seismic surveys and developed data packages. What more should be done to present Bangladesh’s offshore potential effectively? Compared to onshore areas, offshore data may be limited, but it is certainly not insigni?cant.

Bangladesh is entering another dif?cult summer marked by rising temperatures, worsening loadshedding, and deep uncertainty in power supply. Despite having enough installed generation capacity, shortages of gas, coal, and imported fuel, combined with massive unpaid dues, have left much of that capacity idle. Rural communities, industries, and small businesses are bearing the heaviest burden. Without urgent action to secure fuel, clear arrears, improve ef?ciency, and strengthen long-term energy planning, power shortages will continue to disrupt economic growth and daily life.T he return of load-shedding after a long break feels like an old wound reopening.

as temperatures climb and heatwaves spread across the country, households, factories, and farms are once again being forced to plan their days around power cuts.

in cities, the inconvenience is frustrating; in rural Bangladesh, where outages last up to 16 hours, it is crippling.

this summer was always going to be dif?cult. But what makes the crisis more painful is that Bangladesh has enough installed power generation capacity on paper.

the real problem lies elsewhere – fuel shortages, unpaid bills, poor planning, and years of neglect in developing domestic energy resources. The result is a system that looks strong from the outside but struggles to keep the lights on when demand rises.

as temperatures rise, the electricity de?cit-and consequently loadshedding-is increasing. With the onset of heatwaves, the Bangladesh Power Development Board (BPDB) is struggling to meet electricity demand.

an analysis of demand and supply during the last two weeks of April shows that on April 22, total electricity demand over 24 hours reached 378 million kilowatt-hours (kwh).

against this, BPDB was able to supply only 326 million kwh, leaving a de?cit of around 53 million kwh.

in megawatt terms, peak evening demand on that day reached 16,647 MW, while supply stood at 14,467 MW. Daytime peak demand supply was 12,216 MW. During peak hours, loadshedding amounted to 2,180 MW.

although load-shedding had little impact in the capital, Dhaka, on that day, its effects were severe in rural areas.

according to media reports, rural regions experienced power outages lasting between 6 and 16 hours.

in particular, the impact was acute in the service areas of 80 rural electricity cooperatives under the Bangladesh Rural Electri?cation Board.

the electricity shortage has disrupted daily life and negatively affected industry and commerce.

it is reported that production in small and medium industries has been disrupted by up to 30% due to loadshedding. Similarly, production in the ready-made garment sector is claimed to have declined by 5-25%.

the Power Division has expressed regret over the electricity shortage and public suffering.

it stated that this summer will not be completely free of load-shedding, although the situation is expected to become tolerable from early May. However, many critics have blamed the newly formed government, arguing that power shortages have increased whenever the BNP has come to power, sometimes reaching extreme levels.

in reality, the current situation itself has made it dif?cult for the newly formed BNP government to ensure electricity supply. During this summer, peak electricity demand is projected to reach 18,500 MW.

in contrast, the country’s installed grid-connected capacity, including imports, stands at 28,494 MW. However, due to shortages of fuel supply, BPDB is struggling to generate an average of only 13,000 MW.

additionally, BPDB to generate up to 4,000 MW from HFO plants at peak times.

the current outstanding dues in the power sector amount to Tk 56,000 crore. BPDB’s inability to pay these dues has created a crisis in securing fuel supplies, especially coal and oil. Meanwhile, Petrobangla is currently unable to supply even half of the gas required to operate gas-based power plants, and this situation is unlikely to improve in the near future-in fact, it may worsen. Speaking at an event on the power crisis, Minister for Power, Energy and Mineral Resources Iqbal Hasan Mahmood, MP, stated that current loadshedding stands at around 1,200-1,500 MW, which is expected to decrease to 800-900 MW in early May. However, he emphasized that load-shedding will continue throughout the summer. He said, ‘This is not the fault of the current government.

the previous Awami League government severely weakened this sector through rampant corruption, establishing power plants without ensuring fuel supply, and creating massive arrears.

the interim government then pushed the sector into an ICU-like condition. We have started working to restore the sector’s health and ensure electricity supply to meet demand.’ He added that achieving this goal will not be easy.

the current outstanding dues in the power and energy sector amount to Tk 56,000 crore.

although efforts are underway to clear these dues, it will take time to restore normalcy. He also noted that the ongoing U.S.-Israel- Iran con?ict has further worsened the ?nancial crisis in the energy sector.

experts believe that ?awed policies in the power and energy sector are responsible for the current situation, where shortages persist despite having suf?cient installed capacity.

the main reason is the neglect of domestic energy resources-particularly gas and coal exploration and extraction-over the past 25 years. From 2009 to 2024, numerous power plants were established to ensure an uninterrupted electricity supply, raising total generation capacity to 28,494 MW-more than suf?cient for the country’s demand. However, between 2018 and 2020, over 2,000 MW of diesel- and furnace oil-based capacity was added unnecessarily, leading to excess capacity and forcing BPDB to pay high capacity charges. Moreover, while generation capacity increased, there was no planned effort to ensure a steady supply of gas and coal through domestic exploration or expansion of import infrastructure. Instead, the sector became increasingly import-dependent.

as a result, the country’s dependence on imported energy has risen sharply- from 25% in 2015 to about 59% currently-and continues to grow.

experts believe that, despite having suf?cient capacity, load-shedding is occurring mainly due to the inability to ?nance fuel supply. Former BERC member Engineer Mizanur Rahman believes that LNG import capacity is currently limited to 1,100 MMCFD, while domestic gas supply is also declining.

therefore, even with adequate ?nancing, it will not be possible to signi?cantly increase the gas supply.

as a result, the full capacity of coal-based power plants must be utilized.

at the same time, arrears in the electricity import sector must be reduced to ensure full supply. Sha?qul Alam, Lead Energy Analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), Bangladesh, believes there is no alternative to ensuring ?nancing for coal imports. Due to coal shortages, less than 50% of total generation capacity was utilized in March. Former BUET dean Dr.

ijaz Hossain noted that there is no alternative but to provide ?nancing to ensure coal power plants operate at around 85% capacity.

although gas-based power capacity exceeds 12,194 MW, the current gas supply allows generation of only 5,200-5,500 MW.

there are no signs of gas supply improving between May and September. Petrobangla has stated that it is purchasing LNG from the spot market at double the price to supply up to 950 MMCFD for grid power. However, demand is around 2,200 MMCFD. Currently, total gas supply in the country, including RLNG, is about 2,600-2,700 MMCFD, while demand is at least 4,000 MMCFD. Including imports from Adani, total coalbased power capacity stands at 7,629 MW, of which 6,029 MW is installed domestically. Due to coal shortages, these plants have been operating below 50% load. Professor Ijaz believes that to minimize shortages during summer, coal power plants must operate at 85% capacity, which could generate 6,000-6,500 MW. Combined with gas-based generation, the total supply could reach around 12,000 MW.

ensuring at least 1,000 MW from imports would further help. With an additional 4,000 MW from furnace oil and other sources, the total supply could reach around 17,000 MW. However, if demand rises to 18,500 MW, as projected, load-shedding of at least 1,500 MW will be unavoidable. Some units of the Adani and Patuakhali coal power plants that were previously of?ine have now resumed production.

one unit of the Banshkhali SS Power plant is still of?ine but is expected to return soon. To fully utilize coal capacity, outstanding dues-including $669 million owed to Adani-must be gradually reduced.

at the same time, arrears to gasbased IPPs and joint venture plants are also signi?cant. For example, the Jera Meghnaghat power plant alone amounts to about $82 million.

on the other hand, the country’s furnace oil-based power plants have a total capacity of 5,634 MW, about 80% of which are privately owned.

outstanding dues to these plants exceed Tk 14,000 crore. Without the gradual repayment of these arrears, they will also be unable to import fuel oil.

in a conversation with Energy and Power, Bangladesh Independent Power Producers’ Association (BIPPA) President David Hasnat stated that BPDB currently owes its power plants an amount equivalent to nine months of unpaid bills.

as a result, operators are running out of capacity to import fuel oil. He noted that they have been raising this issue since the tenure of the interim government, but received no response. Instead, before leaving of?ce, the interim government imposed liquidated damages on domestic IPPs by violating power purchase agreements without settling outstanding payments. He added that they have requested the current government to clear arrears and resolve the liquidated damages issue. Otherwise, it will be dif?cult to supply electricity from furnace oil-based power plants in the coming months.

a review of power generation data shows that due to rainfall caused by a low-pressure system over the Bay of Bengal, the electricity de?cit has almost dropped to zero.

on April 27, the highest temperature in the country was 28.6°C.

on that day, total electricity demand over 24 hours was 262.09 million kilowatt-hours, while supply reached 261.83 million kilowatt-hours, leaving a negligible de?cit of just 0.26 million kilowatt-hours. During this time, furnace oil-based generation accounted for only 2% of the supply. However, on April 26, when the maximum temperature was 34°C, total demand rose to 308 million kilowatt-hours, while supply was 298 million kilowatt-hours, resulting in a de?cit of 10 million kilowatthours.

on April 22, when the temperature reached 35.4°C, demand surged to 378 million kilowatt-hours, while supply was only 326 million kilowatt-hours, leaving a de?cit of 53 million kilowatt-hours. On that day, 10% of electricity had to be generated from furnace oil, signi?cantly increasing overall generation costs.

this relationship between temperature and demand must be considered in summer management.

once temperatures exceed 35°C, electricity demand rises sharply.

although the peak demand in April was 16,647 MW, only 14,467 MW could be generated.

this means that even though demand was below BPDB’s projected peak, load-shedding remained severe.

engineer Sha?qul Alam believes that once temperatures rise above 35°C, the country’s cooling load increases signi?cantly, leading to higher de?cits.

the World Meteorological Organization has indicated that an El Niño event is active, which will also affect Bangladesh.

as a result, temperatures may exceed 40°C, making it dif?cult to predict how much the power de?cit can be reduced during heatwaves.

the Power Division has stated that planned load-shedding will be implemented nationwide. Previously, when rural areas faced up to 16 hours of load-shedding, Dhaka remained largely unaffected.

at that time, State Minister for Power Anindya Islam Amit informed the National Parliament that instructions had been given to implement load shedding in Dhaka as well, and this policy is now being followed. However, the Power Division’s claim that load-shedding will be limited to 800-900 MW from early May has not reassured consumers. Sector insiders believe that load-shedding may remain tolerable only when temperatures are moderate.

if temperatures rise or heatwaves intensify, BPDB will struggle to manage the de?cit.

experts believe there is no quick solution to address the fuel supply shortage for power generation. However, BPDB must take steps to increase coal supply, ensure emergency oil imports, and maintain electricity imports.

the only way to achieve this is to start clearing arrears.

indeed, all arrears cannot be cleared quickly, and returning to normal conditions will take time.

this will require either increased subsidies or a reduction in BPDB’s losses. Professor Ijaz Hossain believes that the three-year roadmap taken during the Awami League period to align electricity production costs with selling prices should be followed. Recently, BPDB proposed increasing the wholesale electricity tariff by Tk 1.20 per unit from the current Tk 7.04.

at the consumer level, a proposal has been made to increase tariffs by Tk 1.80 per unit for higher-end users. Currently, the production cost per unit of electricity is Tk 12.10, while BPDB’s annual losses stand at Tk 52,000 crore.

ijaz suggests that 50% of the gap between production cost and wholesale price should be addressed through tariff increases within one year. The remaining 50% should be adjusted through reducing waste, corruption, and inef?ciencies, alongside improving operational ef?ciency. Both measures must be implemented simultaneously.

it is worth noting that a Tk 1.0 increase in wholesale tariff per unit would reduce BPDB’s annual losses by Tk 10,000 crore. Summer is still far from over, and for millions of people, that means more nights without fans, more sleepless heat, and more uncertainty for homes, farms, and factories.

until September, managing electricity demand will require more than temporary ?xes. The government must begin clearing overdue payments, keep power plants running at full possible capacity, and ensure load-shedding is planned fairly so that the burden does not fall only on rural communities and small businesses. But solving this crisis is not only about surviving one summer. Bangladesh must also prepare for the years ahead by reducing unnecessary electricity use through better cooling systems, ef?cient appliances, and smarter energy management.

increasing domestic gas and coal supply will take time, so for now, expanding LNG import capacity through additional FSRUs remains unavoidable to handle peak demand.

at the same time, stronger transmission and distribution systems are essential so that electricity generated actually reaches consumers without frequent outages. The country must also move faster on solar power. Raising grid-connected solar capacity from 777 MW to at least 2,000 MW would reduce costly dependence on furnace oil during daytime demand.

the Rooppur Nuclear Power Plant also carries major importance.

if its ?rst unit can supply at least 300 MW from August and begin commercial operation before March next year, it will provide muchneeded relief. Bringing the second unit online before summer 2028 would further strengthen long-term energy security. Rescuing BPDB from its growing debt and ?nancial losses will not be easy. But delaying hard decisions will only make the problem more expensive and painful. Without decisive action now, load-shedding will become not just a seasonal problem, but a permanent obstacle to daily life, industrial growth, and Bangladesh’s economic future

The United Nations has warned that the warming climate phenomenon El Niño is likely to return by mid-2026, potentially driving higher global temperatures and extreme weather events. According to the World Meteorological Organization, El Niño conditions could emerge as early as the May-July period, with early indicators suggesting the possibility of a strong event.

el Niño is a naturally occurring climate pattern that warms sea surface temperatures in the central and eastern Paci?c Ocean, altering global weather systems, including wind, rainfall, and atmospheric pressure.

the last El Niño event contributed to recordbreaking global heat, making 2023 one of the hottest years on record and pushing 2024 to the highest temperature levels ever recorded.

The Department of Environment (DoE) has ?ned two brick kilns a total of Tk 10 lakh in Manikganj for operating without required environmental clearance and of?cial permission.

acting on information, Executive Magistrate Foyjun Nesa Akter conducted a special drive at Mrs Malek Bricks in Khagrakuri village under Dighi Union of Manikganj Sadar Upazila, imposing a ?ne of Tk 5 lakh. In a separate operation in Kandapar village of Saturia Upazila, another illegal brick kiln-Mrs Khan Bricks-was also ?ned Tk 5 lakh for operating without authorization. DoE Deputy Director Abdullah Al Mamun said the kilns had been running without the necessary clearance certi?cates and approvals from the department.

Environment, Forest and Climate Change Minister Abdul Awal Mintoo has emphasized the importance of enhanced technical support, knowledge exchange, and investment cooperation from UNESCO to strengthen Bangladesh’s efforts in forest conservation, environmental protection, and climate change adaptation.

the minister made the remarks during a meeting with UNESCO Representative to Bangladesh Dr. Susan Vize at his of?ce in the Secretariat in Dhaka. During the meeting, the minister highlighted key priorities, including modernization of waste management systems, control of air and water pollution, implementation of the government’s plan to plant 250 million trees over ?ve years, strengthening conservation of the Sundarbans, and enhancing resilience against salinity intrusion in coastal areas. Dr. Vize expressed UNESCO’s interest in further strengthening cooperation in areas such as climate resilience, green campus initiatives, biodiversity conservation, and environmental education.

Bangladesh Police is preparing to formally propose the creation of a specialized ‘Environmental Police’ unit aimed at tackling the country’s growing environmental crimes.

a senior of?cial at Bangladesh Police said the proposal is expected to be presented to the prime minister during the upcoming Police Week. The initiative was discussed at a high-level meeting held at Police Headquarters on April 19, chaired by the Inspector General of Police (IGP). The proposed unit is designed to address a wide range of environmental offenses, including river encroachment, industrial pollution, deforestation, hill cutting, and illegal extraction of natural resources. Law enforcement of?cials say the scale and complexity of such crimes have exceeded the capacity of the conventional policing system, making a dedicated unit increasingly necessary.

Bangladesh could save between $600 million and $900 million in foreign exchange annually by transitioning its one million diesel-run irrigation pumps to solar power, according to Sha?qul Alam, chief energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA). Speaking to a local daily, he warned that while solar adoption has crossed the 500MW mark, the nation is failing to harvest ‘low-hanging fruit’ due to structural barriers. He noted that the massive savings from solar irrigation – calculated on pre-Middle East war diesel prices – remain locked behind a lack of farmer equity and the absence of a seasonal ‘irrigation-to-grid’ business model. ‘The real barriers are not technical; they are ?nancial and structural,’ Sha?qul said, emphasizing that for eight months of the year, these systems sit idle.

Environment, Forest and Climate Change Minister Abdul Awal Mintoo recently expressed optimism that Bangladesh will see signi?cant improvements in waste management within the next year, helping reduce pollution in rivers, canals and wetlands. Speaking in Parliament, he said the government is prioritizing measures to curb environmental degradation, noting that pollution stems from multiple sources beyond industrial activities.

the minister said a proposal is under consideration to establish a waste recycling plant at Amin Bazar, alongside efforts to strengthen waste management systems in urban areas nationwide. He added that industries are being required to install Ef?uent Treatment Plants (ETPs), while the private sector is being encouraged to convert waste into energy and bio-fertilizer.

B a ngladesh is currently facing a severe fuel supply disruption amid the ongoing global energy shock triggered by the 2026 Iran con?ict involving the United States and Israel.

the escalation of hostilities has signi?cantly disrupted crude oil and re?ned product ?ows through critical maritime routes, leading to sharp increases in international fuel prices and tightening global supply chains. As a highly import-dependent country, meeting energy needs from external sources, Bangladesh has been directly affected by these developments, resulting in fuel shortages, long queues at ?lling stations, periodic rationing, and supply instability across the country.

the crisis has exposed structural vulnerabilities in the national energy system, particularly its heavy reliance on imported petroleum and limited ?exibility in storage and re?ning. Rising import costs and logistical constraints have further strained foreign exchange reserves and intensi?ed pressure on domestic fuel distribution systems.

as a result, the energy sector is experiencing heightened volatility, underscoring the urgent need for accelerated infrastructure development, supply diversi?cation, and enhanced strategic resilience. Bangladesh’s energy sector is undergoing a critical transformation as the country moves from a fragmented, import-dependent fuel supply system toward an integrated, infrastructuredriven energy security framework. Strategic investments in key infrastructure projects like the Single Point Mooring (SPM), Eastern Re?nery Limited (ERL)-2 expansion, and IndiaBangladesh Friendship Pipeline offer a strategic pathway to mitigate shortages and build long-term resilience.

these initiatives are not standalone measures; together, they constitute an integrated framework to modernize fuel handling, enhance domestic re?ning capacity, and ensure diversi?ed and resilient supply chains. Collectively, they aim to reduce operational inef?ciencies, lower import costs, and strengthen national capacity to withstand global energy market volatility. However, the success of this transformation depends not only on infrastructure completion but also on timely operationalization, sound governance, and effective coordination among key stakeholders. Saudi Arabia and the UAE, with BPC importing crude oil under annual agreements and procuring ?nished petroleum products through G-to-G contracts and international tenders. In FY 2024-25, BPC imported 1.51 million tons of crude oil for processing at ERL, complemented by 0.6 million tons of domestic gas condensate, producing 1.5 million tons of petroleum products, close to ERL’s 1.57-million-tonne re?ning capacity.

additionally, 6.2 million tonnes of petroleum products were imported to meet national demand, highlighting the sector’s continued reliance on imports to ensure energy security. Between 2013-14 and 2024-25, Bangladesh’s petroleum imports showed steady ?uctuations in crude oil and re?ned products. Crude oil volumes ranged from 1.09 million tons in 2015-16 to a peak of 1.55 million tons in 2022-23, while re?ned product imports varied between 3.67 million tons in 2015-16 and 5.45 million tons in 2017-18.

overall totals moved from 5.35 million tons in 2013-14 to 6.25 million tons in 2024-25, with the highest intake recorded at 6.90 million tons in 2022- 23.

this trend re?ects both growing demand and periodic adjustments in sourcing strategies, balancing crude imports with re?ned product in?ows to meet national energy needs. Imported crude oil and re?ned petroleum products data for FY 2013-14 to FY 2024-25 are furnished below: The Single Point Mooring with Double Pipeline project was developed as a structural solution to the draft limitations of Chattogram Port, which historically prevented large crude carriers from docking.

to overcome this constraint, the Government and BPC initiated the establishment of a modern offshore unloading system, constructed by China Petroleum Pipeline Engineering Co. Ltd. (CPPEC).

this system marks a fundamental shift in Bangladesh’s fuel logistics by enabling direct offshore-to-onshore transfer of petroleum, eliminating the need for costly and inef?cient lighterage operations.

as a result, it serves as a critical enabler for the expansion of Eastern Re?nery Limited and strengthens the country’s longterm energy resilience.

technically, the SPM is designed to handle up to 9 million tons per annum (MTPA) through a 220 km double pipeline network, including a 36-inch crude oil line and an 18-inch diesel line.

the offshore segment extends 146 km, featuring an 11 km Horizontal Directional Drilling section, while the onshore network spans 74 km.

at Maheshkhali, the system is supported by modern storage facilities with dedicated crude and diesel tanks.

this infrastructure signi?cantly improves operational ef?ciency, reducing unloading time from 11-15 days to just 48 hours for large tankers.

the dual pipeline con?guration allows simultaneous transfer of crude oil and re?ned products, enhancing throughput and supply reliability. However, a pipeline disruption during a trial run in early 2024 highlighted the importance of rigorous commissioning and professional operational oversight.

economic Signi?cance and Strategic Role The economic rationale for the SPM is compelling. By replacing the traditional lighterage system, the project is expected to reduce annual unloading and transportation costs by approximately Tk 800 crore, with long-term savings potentially reaching Tk 80 billion through improved ef?ciency and scale. More importantly, the SPM functions as a vital ‘forward linkage’ for the ERL2 expansion.

the planned increase in national re?ning capacity to 4.5 million tons per year depends heavily on the SPM’s ability to ensure uninterrupted and high-volume crude supply.

operational Challenges and Bottlenecks Despite its strategic importance, the SPM facility has remained largely non-operational for nearly two years, creating ?nancial and operational risks. The primary constraint has been the failure to appoint a quali?ed Operation and Maintenance contractor.

the initial tender process collapsed when the sole bidder, PT Pertamina, quoted US$ 117 million for a ?ve-year contract, signi?cantly higher than the allocated budget of US$ 88 million.

this led to re-tendering delays and prolonged inactivity.

additionally, the issuance of the TakingOver Certi?cate to CPPEC has triggered the countdown of the warranty period. With the guarantee expiring in February 2026, the government now faces increased exposure to technical risks and maintenance liabilities. Meanwhile, the US$ 554 million project loan continues to accrue servicing costs without generating operational returns, placing pressure on public ?nances. Further delays have been linked to incomplete trial performance, unresolved technical issues, and reported resistance from vested interest groups bene?ting from the continuation of lighterage operations.

to safeguard this strategic investment, immediate action is required.

the government should prioritize the rapid appointment of a competent OandM operator while considering an interim arrangement with CPPEC to maintain system integrity.

accelerating coordination with the ERL-2 expansion is equally essential to ensure optimal utilization of the facility.

timely operationalization of the SPM is critical not only to prevent ?nancial losses but also to unlock its full potential as a cornerstone of Bangladesh’s modern energy supply chain and long-term energy security.

expansion of ERL-2 The expansion of Eastern Re?nery Limited (ERL-2) represents a critical step in strengthening Bangladesh’s energy security amid global fuel market volatility.

the ERL-2 project aims to increase total re?ning capacity from 1.5 million to 4.5 million tons per year by establishing a new 3-million-tonne unit. Beyond capacity enhancement, the project introduces a major technological upgrade, enabling production of Euro-5 standard fuels.

euro-5 fuels represent a major step toward cleaner energy use, reducing sulfur and particulate emissions while improving air quality and engine ef?ciency.

it is designed to process diverse crude oil grades from global sources, reducing dependence on a single supply region and enhancing supply ?exibility.

economically, ERL-2 is a transformative initiative. With a revised cost of approximately Tk 31,000 crore (US$2.5 billion), ?nanced through a 60:40 government and BPC/ERL contribution, the project prioritizes national ownership. By shifting from imported re?ned fuels to domestic crude processing, it is expected to save US$ 9-11 per barrel and signi?cantly reduce foreign exchange out?ow.

the re?nery will meet up to 45-50% of national petroleum demand and optimize the use of the SPM facility, which can handle 4.5 million tons of crude annually.

once operational, ERL-2 will diversify product output, including diesel, gasoline, jet fuel, furnace oil, LPG, and lube base oil, while upgrading existing production to Euro-5 standards.

this will not only improve supply reliability but also enhance the country’s competitiveness in the energy sector. Recently, key preparatory milestones have been achieved, including approval of the DPP, completion of Front-End Engineering Design (FEED) by Technip (France), and appointment of Engineers India Limited as Project Management Consultant.

the project is targeted for completion by 2030.

eRL-2 is not merely an expansion project; it is a cornerstone of Bangladesh’s long-term energy strategy, enabling greater self-reliance, cost ef?ciency, and environmental sustainability.

india-Bangladesh Friendship Pipeline The India-Bangladesh Friendship Pipeline marks a signi?cant milestone in regional energy cooperation and crossborder infrastructure development. This project was designed to ensure a reliable and cost-effective supply of fuel oil to Bangladesh, reducing dependence on traditional modes of transportation such as rail and road, which are often subject to delays, higher costs, and logistical challenges. The 131.5 km India-Bangladesh Friendship Pipeline, commissioned in March 2023, establishes a direct energy corridor from Siliguri in West Bengal, India, to the Parbatipur Depot in Dinajpur, Bangladesh, with only about 5 km of the pipeline located within Indian territories. Supplied by the Numaligarh Re?nery in Assam, the system provides a seamless, secure, and ef?cient channel for cross-border fuel transfer.

under the bilateral framework, Bangladesh is entitled to import up to 1 million metric tons of high-speed diesel annually through a phased approach. Initial supply volumes are set at 200,000 tons per year for the ?rst three years, followed by 300,000 tons annually in the subsequent phase, and eventually scaling up to 500,000 tons per year.

this gradual increase is designed to align infrastructure readiness with demand growth and operational capacity. Despite its strategic potential, the pipeline’s full utilization is currently constrained by limited downstream storage capacity. Existing facilities at Parbatipur can accommodate approximately 16,000 tons, which is insuf?cient to support higher import volumes.

earlier plans to construct six additional storage tanks, each with a capacity of 6,761 tons (totaling over 40,000 tons), remain pending and require urgent implementation. From a strategic perspective, the pipeline plays a critical role in enhancing energy security in northern Bangladesh by ensuring an uninterrupted fuel supply to agriculture, transport, and industry. It also reduces logistical pressure on Chattogram port and complements national infrastructure such as the SPM system and the ERL-2 expansion.

to fully realize the bene?ts of this infrastructure, a coordinated policy and investment approach is essential. The Bangladesh Petroleum Corporation should prioritize the expansion of storage facilities at Parbatipur to enable higher throughput and operational ?exibility. Simultaneously, proactive engagement with Indian counterparts is necessary to optimize import volumes in line with national demand growth. Strengthening downstream infrastructure, ensuring policy continuity, and enhancing regional cooperation will be key to transforming the pipeline into a cornerstone of Bangladesh’s integrated energy supply system. Conclusion The combined implementation of the SPM facility, ERL-2 expansion, and the India-Bangladesh Friendship Pipeline represents a comprehensive roadmap toward achieving long-term energy security for Bangladesh. While each project individually delivers signi?cant technical and economic bene?ts, their true strategic value lies in their integration, linking offshore crude handling, domestic re?ning, and regional fuel supply into a cohesive and ef?cient system. However, persistent delays in commissioning critical infrastructure, particularly the SPM, highlight systemic governance and operational challenges that must be urgently addressed.

idle assets, rising debt obligations, and exposure to vested interests risk undermining the very objectives these projects are designed to achieve. Without decisive action, the anticipated economic gains and ef?ciency improvements may remain unrealized.

to fully harness the potential of these investments, Bangladesh must prioritize transparent governance, expedite operational readiness, and ensure alignment between infrastructure development and policy execution.

if effectively synchronized, these initiatives can signi?cantly reduce import dependence, conserve foreign exchange, and position Bangladesh as a more resilient and strategically integrated energy economy