Bangladesh’s Import Bill Rises by $4.12 Billion in Seven Months; Seeks Help From Germany, France and UK to Ease Pressure

❐ Staff Reporter

Bangladesh has spent an additional $4.12 billion on fuel and fertilizer imports in the past seven months due to the impact of the Middle East war. Rashed Al Mahmud Titumir, the Prime Minister’s Finance and Planning Advisor, has sought cooperation from Europe’s three major economies—Germany, the United Kingdom, and France—to help manage this additional pressure.

He said in Bangkok on Friday that Bangladesh has spent an additional $4.12 billion on importing various products including fuel and fertilizer due to the Iran war. This expenditure is a big burden for an economy like Bangladesh.

He met with representatives of Germany, France and the UK on the sidelines of the ongoing IMF and World Bank annual meetings in Bangkok. He said he sought the countries’ help to cover the increased cost of imports.

Meanwhile, a staff mission from the IMF is arriving in Dhaka early next week to discuss the $4.5 billion loan sought from the IMF to address the country’s ongoing economic crisis.

After meeting with the IMF on Friday, Finance Minister Amir Khasru Mahmud Chowdhury said the mission will meet with officials from the Bangladesh Finance Ministry, Bangladesh Bank and related agencies in the next two weeks. The two sides will reach an agreement on the terms of the loan within that period.

Concerned people said that the price of fuel oil and fertilizer has increased in the international market due to the Iran war. In addition to disruptions in supply, transportation costs have also increased. As a result, import costs are increasing, pressure is being placed on foreign exchange, and the government’s subsidy costs are also increasing.

According to data from Bangladesh Petroleum Corporation (BPC), an additional Tk 23,000 crore has been spent on fuel oil imports in the six months since March due to the impact of the Middle East crisis.

At the same time, fuel transportation costs have increased from $3-4 per barrel to $15-17.

Along with fuel, there has been instability in the fertilizer market. The price of urea fertilizer per ton in the international market has increased from about $422 to $850. This has increased the cost of importing fertilizer and the need for government subsidies in the agricultural sector.

Concerned people fear that the increase in fuel and fertilizer prices could have an impact on various sectors of the economy. If fuel costs increase, transportation, power generation, and industrial production costs will also increase. If fertilizer prices increase, farmers’ production costs will increase, which could also affect food prices. If the war drags on, the pressure on the government could increase further.

The annual meetings of the World Bank Group and the IMF are being held in Bangkok, the capital of Thailand, from October 12 to 18.

Finance ministers, central bank governors, policymakers, development partners, and private sector representatives from different countries around the world are participating in the meeting organized at the conference center.