Rashid Ahmed waited two hours at a fuel station in Dhaka’s Mirpur district on March 10, watching the line of motorcycles stretch into the next block as the pump operator turned away customer after customer. The forty-two-year-old delivery rider had visited three stations since dawn, each time finding either empty tanks or queues too long to wait through before his first delivery deadline. His motorcycle sat idle while his family’s income evaporated with each passing hour.

Ahmed’s frustration mirrors the experience of hundreds of thousands across Bangladesh as government-imposed rationing collides with daily survival. The rationing emerged from a crisis that began thousands of kilometers away in the Persian Gulf.

During mid March, the government withdrew the temporary rationing system for fuel sales; however, shortages, long queues, and irregularities at most filling stations made it difficult for vehicles to obtain fuel.

As tensions between Iran, Israel, and the United States escalated into open warfare, Bangladesh found itself plunged into an energy emergency despite the geographic distance. The country of 175 million people imports roughly 95 percent of its energy, making it almost entirely dependent on global fuel markets.

When the Strait of Hormuz became a battleground, the world’s oil supplies dipped, as the narrow waterway is the gateway for nearly a third of the world’s seaborne oil. Bangladesh felt the squeeze immediately.

The cascade begins: Supply lines cut

The crisis hit with devastating speed in early March.

QatarEnergy, one of Bangladesh’s three long-term liquified natural gas (LNG) suppliers, suspended deliveries, invoking force majeure, after Iranian attacks on energy infrastructure disrupted production. Qatar accounts for 20 percent of global LNG supply. Within days, the other two suppliers followed suit, cutting off Bangladesh from all contracted deliveries.

Bangladesh had been purchasing spot LNG cargoes at approximately ten dollars per million British thermal units in January. By mid-March, those prices had skyrocketed to USD 28.28 per MMBtu (million metric British thermal units) for emergency purchases.

“We are buying spot LNG at an exorbitant price, which is almost 2.5 times higher than the price of four days ago,” Energy Secretary Saiful Islam told reporters.

This price explosion created a vicious cycle. When Petrobangla floated an initial tender for spot LNG on March 1, it received zero bids. Traders considered Bangladesh’s market too volatile and risky. Only after offering even higher prices did the country secure cargo from Gunvor at USD 28.28 MMBtu and Vitol at USD 23.08 per MMBtu.

“We are now looking for alternatives from the spot market to fill the window left vacant by the three suppliers,” Petrobangla Chairman Md Arfanul Hoque acknowledged.

Bangladesh was scheduled to receive 115 LNG cargoes in 2026. Officials projected losing forty of them due to disrutptions in Western Asia.

Who gets the gas?

Power generation and household consumption took precedence over industrial uses. This meant four of five state-run urea fertilizer factories had to shut down for at least fifteen days. Only the Shahjalal Fertilizer Company continued operating, along with one private facility.

Bangladesh was in the middle of the Boro season, when rice paddies require consistent irrigation and fertilization. Government officials insisted there was no immediate crisis due to existing stocks. Farmers and agricultural experts worried about medium-term shortages.

Meanwhile, gas supply to the power sector dropped from 870 million cubic feet per day (mmcfd) to 820 mmcfd. Officials warned this reduction would likely increase power load-shedding across the country and could lead to blackouts.

“Until the supply side is fixed, I have to use what I have in my hand in a prudent manner,” Power and Energy Minister Iqbal Hassan Mahmood Tuku told reporters. “We must use what we have sparingly. If people cooperate, it will be possible to overcome this crisis.”

Universities closed, fuel rationed

On March 8, authorities announced that all universities would close early, advancing Eid holidays to reduce electricity consumption.

University campuses consume large amounts of power for dormitories, classrooms, laboratories, and air conditioning. Shutting them down offered immediate relief to the strained power grid. Students faced uncertainty about when normal operations would resume.

Simultaneously, the government ordered petrol pumps to reduce daily sales by 10 percent to preserve national fuel reserves. This rationing triggered panic across major cities. Long queues formed at fuel stations as motorists rushed to fill their tanks.

Drivers reported waiting hours to purchase fuel. Some stations ran dry by midday.

The industrial toll

The ready-made garment industry accounts for 84 percent of Bangladesh’s exports and employs millions of workers.

When power cuts doubled to as much as five hours per day, factories faced impossible choices. Industry leaders described a nightmare scenario unfolding since the conflict began in late February. Running diesel generators during extended outages dramatically increased operating costs.

In recent months, many textile and garment factories operated at only 40–50 percent capacity. These production losses threatened export orders.

By early March, diesel reserves had fallen to just nine days of supply, measured at 115,473 tons as of March 4.

The government scrambled to secure emergency shipments. Bangladesh received 5,000 metric tons through a cross-border pipeline from India’s Numaligarh Refinery. Officials were negotiating for an additional 30,000 metric tons from the Indian Oil Corporation.

Household struggles

For ordinary Bangladeshi families, the energy crisis manifested most painfully in rising cooking fuel costs.

The price of a 12.5 kg liquefied petrolium gas (LPG) cylinder, which most households use to operate stoves and burners, surged from Bangladeshi Taka (BDT) 900 to 1,500 (USD 7.3 to 12.2), adding between BTD 500–800 (USD 4–6.5) to monthly household expenses. The minimum wage in Bangladesh is BDT 12,500 per month (approximately USD 101). For low-income families already struggling with inflation, this increase forced painful adjustments. Some families began undercooking meals to conserve gas. Others reverted to traditional fuels like wood and dung.

“The Middle East war has made LPG imports very difficult,” Abdur Razzaq, Managing Director of JMI Group, explained. “Freight costs are rising, shipping routes are uncertain, and traders are becoming cautious.”

Transportation costs for LPG jumped to USD 275 per ton, compared to the Bangladesh Energy Regulatory Commission’s calculation of USD 120 per ton.

“There was no risk of a shortage until March, considering the LPG already imported by the private sector,” Mostafa Kamal, Chairman of Meghna Group of Industries, stated. “Our concern began in April.”

His company was attempting to source LPG from Vietnam, Taiwan, Malaysia, and China as alternatives to Middle Eastern suppliers.

A fiscal time bomb: The cost of crisis

Analysts estimated that spot LNG purchases between 2022 and 2024 could cost USD 11 billion. This enormous outlay strained foreign exchange reserves and forced difficult trade-offs across government budgets.

“If the disruption drags on, we’ll have to lean more on costly spot LNG, which will add to our import burden and tighten supplies for power and industry,” an energy ministry official told Reuters, speaking anonymously.

Each month of elevated prices deepens Bangladesh’s vulnerability.

Petrobangla requested additional subsidies from the government to cover the gap between international prices and domestic retail rates. The government’s own fiscal position remained tight, with limited room for increased energy subsidies.

“There is no fuel shortage at this moment. In fact, we have increased fuel supply compared to last year,” Minister Tuku assured recently. However, in early March, he addressed the issue: “If consumption is controlled, we will be able to run March properly. If committed supplies arrive, the pressure will ease.”

Domestic fuel prices remained unchanged for the third consecutive month by absorbing rising import costs through heavy subsidies.

BDT 5,000 crore (about USD 408,500) was spent on subsidies in March alone, adding to the strain on the budget and further widening the gap with international market prices.

Diesel is being sold under subsidy at BDT 100 (USD 0.82) per liter, while prices of octane remain at BDT 120 (USD 0.98) per litre, while the market price remains at BDT 180 (USD 1.61) and BDT 150.72 (USD 1.22) respectively.