Crude Oil Shortage Puts Bangladesh’s Eastern Refinery at Risk of Shutdown

Bangladesh’s only state-owned oil refinery, Eastern Refinery PLC (ERL), is facing a potential shutdown due to a prolonged shortage of crude oil, with no shipments arriving for over a month and a half.

Officials warn that if a new supply does not reach the country soon, refinery operations may have to be halted. To avert this, the Bangladesh Petroleum Corporation (BPC) is working to urgently import 100,000 metric tons of crude oil from Malaysia. The shipment is expected to arrive between April 10 and 13, which could help keep the refinery operational.

BPC Chairman Md. Rezanur Rahman said efforts are underway to ensure continuous operations at ERL. “We are in the process of importing 100,000 tons of crude oil from Malaysia. Once the letter of credit is opened, a vessel will be chartered. If everything proceeds as planned, the shipment should arrive within April 10–13, and we may not need to shut down the refinery,” he said.

He also noted that attempts are ongoing to bring in another crude-laden vessel, Nordic Pollux, currently stranded in Saudi Arabia due to ongoing tensions in the Middle East. The vessel is believed to be carrying around 100,000 tons of crude oil.

Typically, Bangladesh imports crude oil for ERL from Saudi Arabia and the United Arab Emirates. However, due to disruptions caused by conflict in the Middle East—particularly affecting shipping through the Strait of Hormuz, a key global oil transit route—scheduled shipments have been delayed. Nearly 20 percent of the world’s oil passes through this corridor.

According to sources, the last crude shipment of approximately 100,000 tons arrived on February 18. Since then, no new consignments have reached the country. Of the three shipments usually imported every two months, two have failed to arrive due to the crisis.

ERL has a daily refining capacity of around 4,100 to 4,200 metric tons. As of March 30, crude stock stood at approximately 30,000 tons, which at the time was expected to last until April 7. Officials have since reduced refining rates to stretch existing reserves.

Established in 1968 and located in Patenga, Chattogram, ERL has an annual refining capacity of about 1.5 million metric tons. The refinery produces 13 types of petroleum products, including diesel, LPG, furnace oil, petrol, kerosene, naphtha, and bitumen.

Industry insiders warn that a shutdown could put pressure on the country’s energy security, as ERL supplies roughly 20 percent of Bangladesh’s total fuel demand, which stands at around 6.8 million tons annually. A halt in refining would increase reliance on imported refined petroleum products, which are more expensive than crude oil, potentially raising overall costs.

However, ERL General Manager (Development and Control) Mohammad Tajul Islam expressed cautious optimism. “With the current stock, operations can continue until April 10–12. If the Malaysian shipment arrives on time, there may be no need for a shutdown. Even if there is a brief interruption, it will not significantly disrupt fuel supply, as the refinery undergoes routine maintenance shutdowns every year,” he said.