Dhaka:Letters of credit (LCs) for importing petroleum and petroleum products in Bangladesh rose by approximately 63 percent year-on-year to $3.7 billion in the first quarter of the current fiscal year (FY27). This increase comes as the Middle East conflict has driven up global oil and gas prices.
According to Bangladesh Sangbad Sangstha, Bangladesh Bank data shows that LCs for petroleum and petroleum product imports amounted to $2.28 billion in July-September of the previous fiscal year. LCs for crude oil imports tripled to around $630 million in the first quarter of FY27 from over $200 million a year earlier. Additionally, LCs for other petroleum products, including gas, rose to $2.4 billion from $1.12 billion during the same period.
LC settlements for petroleum and petroleum product imports also saw a 26 percent increase year-on-year, reaching $2.93 billion in July-September. Global average Brent crude prices surged more than 40 percent year-on-year to $97 a barrel in the same period, compared to $69 a barrel a year earlier, based on World Bank's commodity price data. Similarly, the average price of liquefied natural gas (LNG) in Japan increased to $14.45 per million British thermal units (MMBtu) from $11.73 a year earlier.
Bangladesh relies on imports for over one-third of its natural gas demand. Following QatarEnergy's declaration of force majeure, the country has turned to the spot market for LNG supplies, with spot-market prices now around $30 per MMBtu, nearly three times the level typically paid before the Middle East conflict. This has added pressure to Bangladesh's energy budget as the nation requires more than 6.8 million tonnes of petroleum annually, with diesel making up more than two-thirds of the demand.