MediumIV Macro Policy & Sovereign Debt21 September 2026, Monday
Bangladesh raises prices of 4 fuel products by 20 taka a litre; diesel at a record 135 taka
The Bangladesh government raised the price per litre of diesel, petrol, octane and kerosene by 20 taka each, effective 21 September 2026. Diesel rose from 115 to 135 taka; all 4 products reached their highest-ever retail price levels.
According to a report in The Daily Star dated 21 September 2026, the new prices are 135 taka for diesel, 160 for petrol, 165 for octane and 155 for kerosene. Since the BNP government took office in February 2026, diesel has risen from 100 to 135 taka, or 35%; petrol from 116 to 160, octane from 120 to 165 and kerosene from 112 to 155 taka. This is the new government's 3rd fuel price increase. The state-owned Bangladesh Petroleum Corporation (BPC) lost 22,875 crore taka in March–August, was losing about 109 crore taka a day on diesel alone before the hike, and 19,500 crore taka was diverted from development projects to working capital.
According to the same report, BPC's full-cost diesel price for September is 187 taka a litre; in other words, even the new price is about 52 taka below cost. The hike is expected to avert losses of about 10,000 crore taka a year. Diesel accounts for 64% of total petroleum consumption, about 4.35 million tonnes a year; 60% of it is used in transport, 15% in agriculture and 10% in power generation. The Rio Times puts BPC's losses at 228.75 billion taka, about 1.86 billion dollars.
According to a calculation by Daily Waadaa on 22 September at an exchange rate of 123.65 taka to the dollar, 135 taka is equivalent to about 1.09 dollars, below the equivalent prices of 185.48 taka in Pakistan and 161.24 taka in Nepal. The pass-through of the hike to inflation and transport fares had not been announced as of 23 September.
Talay assessment
Bottom line
Dhaka is shifting the bill for the energy shock from the state company's balance sheet to consumers, but the 135 taka price is still below the 187 taka cost. This means further hikes remain possible and that, in an economy where 60% of diesel is used in transport, inflationary pressure will rise in the coming months.
Likely effects
- Bangladesh inflationNegativeWeeks
Diesel's weight in transport and agriculture makes a rapid pass-through of the hike to food and transport prices likely.
- Public financesPositive1–6 months
Averting losses of about 10,000 crore taka a year partly eases the pressure from resources diverted from the development budget.
- Ready-made garment supply chainUncertain1–6 months
Higher transport and energy costs raise unit costs for buyers sourcing from Bangladesh, indirectly affecting price competition with Turkish garment makers.
Possibilities, ranked
- 1Price held, subsidy continues50%
The government holds the new price for a few months and continues to cover the cost gap from the budget.
Watch: Inflation data due in October and BPC's monthly loss figure
- 24th hike comes35%
Because the gap between cost and selling price has not closed, a new hike is made before the end of the year.
Watch: A new price announcement by the Energy and Mineral Resources Division
- 3Partial retreat under backlash15%
Following backlash in the transport and agriculture sectors, part of the hike is reversed.
Watch: Transport strikes or a government announcement of a price cut
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Diesel (per litre)▼ 115 → 135 taka
- BPC loss (Mar–Aug)▼ 22,875 crore taka