The country has to regularly import diesel because of its inadequate oil refinery and storage facilities that have not been upgraded since 1968.
A project proposal to raise the capacity of the country's only state-owned Eastern Refinery Limited (ERL) was made 10 years ago.
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However, physical work remains a far cry as the proposal, revised over 10 times, has yet to get cabinet approval.
Had the project been implemented earlier, the country would have been able to import more crude oil, which is cheaper, and refine it to make diesel.
Bangladesh could have saved Tk 2,500 crore a year had the project been implemented, mentions the Development Project Proposal for the Eastern Refinery Limited-2 submitted to the Planning Commission in January this year. The proposal has yet to be approved by the Executive Committee of the National Economic Council, officials said.
In 2012, when the plan was made, the cost was estimated to be Tk 13,000, but following the subsequent revisions, the cost went up to Tk 19,372 crore.
After the project is approved by the Ecnec, officials will float a tender inviting companies to bid, ERL Managing Director Md Lokman told The Daily Star.
Energy expert M Tamim said a conglomerate has shown interest in investing in the sector. "They are the ones who seem to have exerted influence to make sure the government capacity did not increase.
The ERL is capable of refining 15 lakh tonnes of crude oil a year. The aim of the project is to raise the capacity to 45 lakh tonnes.
Crude oil was $88 and diesel $135 a barrel, about 159 litres, in the international market yesterday.
If approved by the cabinet, international tenders will be invited for the appointment of contractors. The process may take around nine months. The refinery will take at least five years to be in service, officials said.
In recent months, the BPC has been under pressure due to the dramatic price hike in international market. A barrel of diesel sold for $83 in the international market in December last year. The price reached $170 in June. M Tamim said had the ERL supplied its own diesel in June, each barrel would have cost about $115.
An official said, "If the BPC could import more oil when the price was lower, the government could have saved foreign currency."
The official said at least Tk 15 could have been saved on each litre of diesel if the government could import crude oil and refined it here in Bangladesh.
ERL MD Lokman said officials tried to have the project implemented by Technip, a French company that built the current facility. But it didn't happen as the company was seeking too much profit.
Asked why the process was taking so long, he said he joined last year and did not know enough to make a comment.
In 2020-21, Bangladesh used 72 lakh tonnes of diesel, of which the ERL supplied only 7.2 lakh.
In 2026-27, the annual demand would reach 80 lakh tonnes, it has been projected.