Eastern Refinery Faces Shutdown Threat as Crude Stock Falls to 5 Days

The country’s only state-owned fuel oil refinery, Eastern Refinery Limited (ERL), has fallen into a crisis due to a shortage of crude oil. After attacks by the United States and Israel against Iran, a situation of disruption has prevailed in the Strait of Hormuz, preventing crude oil shipments from reaching the country. Although crude oil had been imported from Middle Eastern countries for refining, no oil has arrived in the past one month. As a result, there is a risk that the refinery’s operations may be shut down due to the shortage of crude oil. However, concerned officials said that efforts are underway to import crude oil from alternative countries to keep it operational.

According to ERL sources, the refinery had a stock of 23,000 metric tons of crude (Brent crude oil) as of March 31. The plant has a daily refining capacity of 4,500 tons, but currently, 3,800 tons are being refined per day. With this, operations can be maintained for seven days. Of this, two days have already passed. ERL still has no specific information about incoming oil shipments. Therefore, by calculation, operations can continue for only five more days. Officials stated that if oil supply is ensured within this period, the refinery will remain operational; otherwise, there will be no option but to shut down operations.

The country’s only state-owned fuel oil refinery, Eastern Refinery Limited (ERL), was established in 1968 in Patenga, Chattogram. Crude (Brent crude oil) is refined at this facility. Through refining, products such as diesel, petrol, furnace oil, LPG, jet fuel, and bitumen are produced. However, octane is not produced at this facility. The refined fuel from this plant reaches consumers through the Bangladesh Petroleum Corporation (BPC).

According to BPC sources, in the fiscal year 2024–25, ERL refined and supplied 732,230 tons of diesel, 386,229 tons of furnace oil, 59,150 tons of petrol, 56,934 tons of kerosene, 57,414 tons of bitumen, 16,187 tons of LPG, 8,071 tons of JBO (jute batching oil), and 153,529 tons of naphtha to BPC. Currently, the annual demand for fuel oil in Bangladesh is 72 million tons. Of this, 92 percent has to be imported by BPC, while the remaining 8 percent comes from local sources. Of the supplied fuel, 1.5 million tons of crude oil is refined by ERL.