The government is collecting Tk 35.82 in duties and taxes on every liter of diesel sold at Tk 135, raising concerns that the fuel tax structure is adding to the cost burden on consumers and businesses amid persistent inflation.
The tax burden has risen significantly since June 2025, when the interim government replaced the fixed tariff-value system with a variable invoice-value mechanism. Under the previous system, total duties and taxes were capped at Tk 16.76 per liter, regardless of fluctuations in international oil prices.
Under the current system, a combined 25% in duties and taxes is applied to the import invoice value. This comprises 6% customs duty, 15% value-added tax (VAT), 2% advance tax and 2% advance income tax.
Consequently, when international oil prices rise, the government’s tax revenue per liter of imported diesel also increases.
At the current price, the government collects Tk 19.06 more per liter than it would have under the previous system.
This higher tax burden comes alongside rising retail fuel prices, increasing costs for transport, irrigation and industrial production.
