Fuel costs directly influence used car prices in Bangladesh. Here’s how:
- Higher Demand for Fuel-Efficient Cars: Rising petrol prices (৳90/litre) compared to CNG (৳16.25/litre) drive buyers toward fuel-efficient vehicles like hybrids and CNG-powered cars. Models like Toyota Aqua (25–35 km/l) and Honda Grace (18–24 km/l) are popular choices.
- Lower Prices for Gas-Guzzlers: High fuel consumption vehicles, such as SUVs and luxury sedans, lose resale value as operational costs rise. For example, a used Haval Jolion costs ৳10–15 lakh compared to its new price of ৳23.79 lakh.
- Shift in Import Patterns: Hybrid imports increased by 154% between 2017 and 2021 due to their fuel efficiency, while high import duties (up to 827% for gasoline vehicles) push buyers toward economical options.
- Impact on Ownership Costs: Fuel efficiency now shapes total ownership costs, with LPG-powered cars retaining higher resale values due to better mileage and lower maintenance costs.
- Market Adjustments to Fuel Swings: The move to market-driven fuel pricing (e.g., petrol price hikes of 51%) has caused buyers to prioritize affordable and fuel-efficient options, reshaping the used car market valued at $1.50 billion in 2025.
Quick Comparison Table:
| Category | Examples | Fuel Efficiency | Price Range |
|---|---|---|---|
| Fuel-Efficient Hybrids | Toyota Aqua, Prius | 22–35 km/l | ৳16–30 lakh |
| Budget Fuel-Efficient | Suzuki Alto | 20–22 km/l | ৳8–12 lakh |
| High Fuel Consumption | Toyota Land Cruiser 300 | 8–10 km/l | ৳3.0+ crore |
Fuel costs are reshaping the market, with buyers prioritizing efficiency and affordability over luxury and size.
Which is CHEAPER to fuel? Gas Cars vs. Electric Cars
How Fuel Costs Affect the Used Car Market
Rising fuel prices in Bangladesh are reshaping the used car market, steering buyers toward more fuel-efficient vehicles. This shift is creating clear winners and losers, with market dynamics increasingly defined by fuel type and efficiency.
Currently, gasoline-powered cars dominate the used car market, making up about 75% of vehicles, while diesel cars account for around 20%. Electric and alternative fuel vehicles still represent a small fraction, but they hold promise for the future. Petrol cars’ popularity stems from their affordability and widespread availability across the country.
Recent price hikes have amplified this shift. Petrol, octane, and diesel prices surged by 51%, 52%, and 43% respectively, while CNG saw a modest 7% rise, widening the cost gap and influencing buyer preferences.
"The unpredictability of fuel hikes has become a significant concern for the people of Bangladesh", says Md. Jahidul Islam Rony, Senior Lecturer & Coordinator at Daffodil Institute of IT.
Vehicles with high fuel consumption – like SUVs, luxury sedans, and older models – are taking a hit as buyers increasingly prioritise long-term running costs. These vehicles are losing resale value, while compact cars, hybrids, and fuel-efficient models are gaining popularity. Such vehicles not only sell faster but also retain better prices.
Interest in alternative fuel options is also growing. LPG-powered vehicles, for instance, are becoming more appealing due to their lower conversion costs, easy access to refuelling stations, and minimal engine modifications. Similarly, CNG-powered cars are gaining momentum, further segmenting the market and pushing fuel-intensive vehicles to the sidelines.
This trend is particularly impactful for lower-income households, which are more affected by rising fuel costs. These families are gravitating toward economical options, creating a two-tier market: fuel-efficient cars command higher prices, while gas-guzzlers struggle to attract buyers.
The market’s value reflects these shifts, standing at $1.4 billion with a 7% compound annual growth rate (CAGR) projected through 2033. Limited public transportation options in many areas make private vehicle ownership a necessity, but buyers are becoming increasingly selective about operational costs.
Looking ahead, these trends are likely to intensify. Government policies promoting sustainable transportation and a growing awareness of environmental issues are gradually expanding the electric vehicle segment, though it remains small for now. In the short term, gasoline-powered cars are expected to maintain their dominance, but the push for fuel efficiency will continue to shape buying habits and pricing in the used car market.
1. Higher Demand for Fuel-Efficient Cars
Influence on Buyer Preferences
Rising fuel prices have drastically changed how car buyers in Bangladesh make their decisions. With petrol now priced at ৳90 per litre, compared to just ৳16.25 for CNG, fuel efficiency has become a critical factor for managing transportation expenses. The stark cost difference – petrol being five times more expensive than CNG – has made fuel economy a top priority for many.
"With rising fuel prices, choosing a fuel-efficient vehicle can significantly reduce your long-term running costs", says GarirBazar.com.
This shift is especially noticeable in Sylhet, where many motorcycle riders are switching to shared CNG-powered auto rickshaws. This change comes after a 51% increase in petrol prices, while CNG saw only a modest 7% rise. In Dhaka, where traffic crawls at an average speed of just 6.4 km/h, fuel efficiency is even more crucial for daily commuters. These changing preferences are also influencing resale values and depreciation trends in the car market.
Impact on Vehicle Depreciation and Resale Value
Fuel efficiency is not only shaping purchase decisions but is also boosting the resale value of vehicles. This is particularly relevant in Bangladesh, where high import duties make cars – both new and used – relatively expensive. As a result, many people hold onto their cars for longer periods.
Toyota dominates the reconditioned car market with an 80% share. Fuel-efficient Toyota models, in particular, command higher resale prices:
| Model | Fuel Efficiency | Price Range |
|---|---|---|
| Toyota Aqua | 25-35 km/l | ৳15-20 lakh |
| Honda Grace | 18-24 km/l | ৳18-25 lakh |
| Toyota Axio | 17-22 km/l | ৳15-20 lakh |
In a country where cars are viewed as long-term investments, choosing fuel-efficient models has become a smart financial move.
Effects on Import and Supply Dynamics
The growing focus on fuel-efficient cars is also influencing import patterns and supply trends. Demand for hybrids and bi-fuel vehicles is surging, with models like the Toyota Aqua offering impressive mileage of up to 35 km/l.
In Dhaka, bi-fuel vehicles – which can run on both petrol and CNG – are becoming increasingly popular. These cars allow drivers to switch to the cheaper CNG option when available, offering greater flexibility and cost savings.
Relevance to the Bangladeshi Market
Several local factors enhance the appeal of fuel-efficient vehicles in Bangladesh. For instance, CNG is a domestically produced energy source, making it much cheaper than imported petrol. At just ৳43 per cubic metre, CNG is a cost-effective alternative that adds to the attractiveness of CNG-compatible cars.
Additionally, more than 90% of cars in Bangladesh are second-hand. This dominant used-car market has shifted buyers’ focus from just the purchase price to the overall cost of ownership. The trend of motorcycle owners upgrading to small, fuel-efficient cars is also contributing to the rising demand for compact vehicles.
Factors like reliability, availability of spare parts, and fuel efficiency are driving car preferences in the country. This explains why models from Toyota and Honda, known for their excellent mileage, continue to fetch premium prices in the used car market – even as fuel prices climb higher.
2. Lower Prices for High Fuel Consumption Vehicles
Influence on Buyer Preferences
When fuel prices rise in Bangladesh, buyers naturally gravitate away from vehicles with high fuel consumption. The increased operating costs make these vehicles much less appealing, particularly in the used car market, where reconditioned vehicles make up 59% of listings. Data shows that sedans account for 36% of these listings, followed by SUVs at 20% and MPVs at 19%. This shift in preferences has a direct impact on the depreciation rates of fuel-inefficient vehicles, which tend to lose value more quickly.
"When fuel prices fluctuate, fuel-efficient cars depreciate slower than gas guzzlers. With growing environmental concerns and stricter emissions regulations, cars with better fuel economy are becoming more desirable. Opting for a hybrid or electric vehicle can be a smart move to mitigate depreciation." – Nathaniel Holmes, LinkedIn Article
Impact on Vehicle Depreciation and Resale Value
High fuel consumption vehicles face steeper depreciation when fuel prices climb. For instance, hybrids and compact sedans typically lose around 37% of their value over five years, while larger, less efficient vehicles can see their value drop by over 50%. In Bangladesh, this trend is clear: a second-hand Haval Jolion is priced between ৳10–15 lakh, whereas a brand-new model costs ৳23.79 lakh. Additionally, vehicles from Chinese brands like Haval tend to depreciate faster compared to more established brands like Honda and Toyota. On average, new cars lose 20–30% of their value within the first three years, but fuel-inefficient models often experience even sharper declines. This depreciation, coupled with higher running costs, pushes budget-conscious buyers to look for more economical options.
Effects on Import and Supply Dynamics
Fuel price increases also shape import trends for high-consumption vehicles. Despite this, gasoline-powered cars remain dominant in the used car market due to their affordability and widespread availability. On the other hand, oil-powered and hybrid vehicles command higher average selling prices than those running on CNG or LPG. Another factor driving buyer choices is the limited availability of spare parts for older or discontinued models, which raises maintenance costs. These dynamics further encourage a shift toward vehicles with better fuel efficiency.
Relevance to the Bangladeshi Market
In Bangladesh, where 90% of vehicles are second-hand, rising fuel costs significantly influence both resale values and import decisions. High import duties and taxes on luxury vehicles make them prohibitively expensive. For example, the Toyota Land Cruiser 300 starts at around ৳3 crore due to these taxes, limiting its appeal to a niche audience. Inflation adds to the challenge, as buyers increasingly opt to either retain their current vehicles longer or switch to more fuel-efficient alternatives. While rising disposable incomes and a growing middle class are driving growth in the used car market, high loan costs remain a barrier. A loan for a ৳25 lakh car at a 14% APR would cost an additional ৳7.5 lakh over five years compared to a loan at 9%. Combined with high fuel consumption, these factors force sellers to lower prices to attract buyers who are mindful of both upfront and long-term costs.
3. Changes in Car Import Patterns and Supply
Effects on Import and Supply Dynamics
Recent fuel price hikes – 52% for octane, 51% for petrol, and 43% for diesel – have significantly influenced car import trends in Bangladesh. In response, importers have shifted their focus, leading to a dramatic 154% increase in hybrid vehicle imports, from 3,296 units in 2017-18 to 8,366 units in 2020-21. The rising demand for hybrids reflects buyers’ preference for fuel-efficient options, as hybrid vehicles offer nearly double the mileage of traditional cars. Models like the Toyota Axio, Honda Grace, and Nissan X-trail have become particularly popular, firmly establishing themselves in import portfolios.
Tax structures have also played a major role in this shift. While gasoline vehicles face duties ranging from 128% to 827%, electric vehicles have a much lower total tax incidence of 59%, making hybrids a more cost-effective choice. Additionally, hybrids benefit from lower import duties due to their enhanced horsepower, delivering performance comparable to higher-capacity gasoline vehicles but at a reduced cost.
Impact on Vehicle Depreciation and Resale Value
The changing import landscape is also reshaping vehicle depreciation trends. Imported reconditioned cars face duties between 132% and 500%, depending on engine capacity. This creates a tiered market where fuel-efficient vehicles hold their resale value better than less efficient options.
Currency depreciation has further increased the cost of imported vehicles, pushing buyers toward more economical models. This trend is particularly noticeable in the luxury segment, where higher import duties combined with currency fluctuations have made these vehicles unaffordable for many buyers.
Relevance to the Bangladeshi Market
Amid rising fuel costs and economic challenges, the Bangladeshi car market has shown some surprising trends. Mohammed Shahidul Islam, secretary general of Barvida, observed:
"It is interesting to see such a rise in demand and import of these vehicles amid ongoing economic crisis and high inflationary pressure".
Despite slower sales in election years, the demand for reconditioned vehicles remained strong through fiscal year 2022-23. This resilience is largely due to the market’s structure, where over 95% of cars are internal combustion engine vehicles, with the rest being hybrid electric models.
However, political changes in August 2024 caused a sharp decline in luxury sedan and SUV sales – dropping by about 95%. Habib Ullah Dawn, president of Barvida, explained:
"They [customers] are in a panic about what may happen in the future".
This uncertainty has shifted buyer preferences toward more affordable sedans like the Toyota Axio and Toyota Corolla. Additionally, SUVs are losing ground to sedans as buyers prioritize cost-effective options in response to economic and political instability.
Meanwhile, the relatively modest 7% price increase for CNG has helped maintain its popularity, particularly in regions like Sylhet. In these areas, CNG-powered autorickshaws dominate, accounting for over 50% of leisure trips and around 39% of work trips. This preference for CNG-compatible vehicles continues to guide import decisions, as importers cater to the mass market’s demand for economical and adaptable options.
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4. Effect on Total Car Ownership Costs
Influence on Buyer Preferences
The rising costs of fuel have reshaped car-buying decisions in Bangladesh, making total ownership costs a major concern. With fuel prices climbing, many buyers are now prioritising long-term operational expenses over initial purchase prices. For instance, searches using fuel type filters surged by 28.94% year-on-year between January and April 2022, as highlighted by AutoTrader CEO George Mienie:
"Year-on-year searches using the fuel type filter increased 28.94% for the period January to April 2022 compared to the same period in 2021. Arguably this is indicative of the effect that the ongoing fuel hikes are having on consumer consideration."
This shift is evident in search trends: interest in diesel cars dropped from 2,000,000 to 1,800,000 searches, and petrol cars saw a decline from 800,000 to 680,000 searches. In contrast, hybrid vehicle searches rose from 102,000 to 118,000, and electric vehicle searches increased from 66,500 to 80,400. These figures reflect a growing awareness among buyers about the potential savings from fuel-efficient vehicles. Many are now willing to pay a bit more upfront for cars that promise lower running costs over time. This trend also impacts how vehicles hold their value, with fuel efficiency becoming a key factor in depreciation rates.
Impact on Vehicle Depreciation and Resale Value
Fuel efficiency plays a significant role in determining a vehicle’s resale value in Bangladesh. For example, cars running on LPG tend to have higher resale values compared to those using CNG. The reasons are clear: LPG offers better fuel efficiency, requires less maintenance, and provides a longer driving range. Its higher energy density results in lower fuel consumption, and the smoother combustion process reduces engine wear and tear. These advantages make LPG-powered vehicles more appealing in the resale market, ensuring they retain their value better over time.
Relevance to the Bangladeshi Market
Fuel pricing doesn’t just influence depreciation – it also shapes broader ownership and travel patterns in Bangladesh. Recent fuel price adjustments, such as a 51% increase for petrol compared to only a 7% rise for CNG, have significantly impacted household budgets and travel habits. Households earning under ৳40,000 per month are particularly affected, often reducing the number and length of trips to manage costs. A study in Sylhet revealed that 59% of respondents reduced trip frequency, 38% shortened trip lengths, and 4% switched to alternative travel modes.
In Sylhet, CNG-powered autorickshaws now dominate local transportation, accounting for over 50% of leisure trips and nearly 39% of work trips. Additionally, many buyers are turning to used cars as a cost-effective alternative. These shifts highlight the growing emphasis on fuel efficiency and affordability in the Bangladeshi car market.
5. Market Changes Due to Fuel Price Swings
Effects on Import and Supply Dynamics
Fuel price fluctuations have a ripple effect on Bangladesh’s automotive supply chain, influencing vehicle imports and distribution patterns. The government’s move from subsidised fuel pricing to a market-based approach has reshaped the automotive sector significantly. For instance, in August 2022, fuel prices rose by over 50% within a single week, forcing the used car market to adjust rapidly.
Despite these challenges, the used car market in Bangladesh has shown remarkable adaptability. Valued at USD 1.50 billion, this market is expected to grow at a 7% CAGR, reaching USD 2.10 billion by 2030. This growth is driven by a noticeable shift in consumer behaviour, as more people opt for used vehicles instead of investing in brand-new ones. These changes in import dynamics are reshaping buyer preferences and the overall market landscape.
Influence on Buyer Preferences
Sharp increases in fuel prices have steered buyers toward more economical options, particularly vehicles powered by compressed natural gas (CNG). While petrol, octane, and diesel prices soared by 51%, 52%, and 43% respectively, CNG prices increased by only 7%. This stark contrast has made CNG-powered vehicles a preferred choice for many. For instance, motorcycle users, burdened by rising petrol costs, are increasingly relying on shared CNG auto-rickshaws for daily commutes. In Dhaka, this trend is evident: 83% of cars, 91% of mini buses, all three-wheelers, and half of the buses in the city now run on CNG. With petrol prices being five times higher than CNG, this shift in preference is hardly surprising.
Impact on Vehicle Depreciation and Resale Value
Fuel price swings also play a significant role in determining vehicle depreciation and resale value. A study conducted in Bangladesh in April 2025 found that fuel consumption accounts for 20% of a used vehicle’s total cost assessment. Using market surveys, the Delphi technique, and the Analytical Hierarchy Process, the study highlighted that engine performance – where fuel consumption is a key factor – makes up 35% of a vehicle’s total cost. As fuel prices climb, demand for fuel-efficient models rises, while less efficient vehicles see their values drop more quickly.
Relevance to the Bangladeshi Market
Local market conditions further amplify the impact of fuel price changes. In Bangladesh, where over 90% of the car market consists of used vehicles, fuel efficiency is a top priority for buyers. Additionally, with 53.77 million internet users recorded in 2022, more customers are turning to online platforms to purchase used cars.
Former World Bank economist Zahid Hussain shed light on the new pricing system:
"Before, there wasn’t a clear formula for setting fuel prices, but now there is one. This system brings transparency and removes the perception of price changes being politically motivated. Instead, changes will reflect economic and market conditions."
The rising interest in hybrid and electric vehicles in Bangladesh reflects a broader effort to navigate high fuel costs. Meanwhile, the affordability of CNG is encouraging buyers not only to purchase more vehicles but also to consider larger, more powerful models. This creates a complex relationship between fuel prices and vehicle choices.
| Fuel Type | Price Increase | Market Impact |
|---|---|---|
| Petrol | 51% | Lower demand for petrol vehicles |
| Octane | 52% | Decline in premium vehicle sales |
| Diesel | 43% | Higher costs for commercial vehicles |
| CNG | 7% | Increased preference for CNG vehicles |
Comparison Table
Here’s a quick look at the price and efficiency differences in Bangladesh’s car market, focusing on how these factors shape ownership costs over time.
Fuel-Efficient vs. High Fuel Consumption Vehicle Comparison
| Vehicle Category | Model Examples | Fuel Efficiency | Price Range |
|---|---|---|---|
| Fuel-Efficient Hybrids | Toyota Aqua | 25–30 km/l | ৳16–22 lakh |
| Toyota Prius | 22–26 km/l | ৳22–30 lakh | |
| Honda Grace Hybrid | 20–24 km/l | ৳18–22 lakh | |
| Honda Fit Hybrid | 22–26 km/l | ৳16–20 lakh | |
| Budget Fuel-Efficient | Suzuki Alto | 20–22 km/l | ৳8–12 lakh |
| High Fuel Consumption | Toyota Land Cruiser 300 | 8–10 km/l | ৳3.0+ crore |
| Haval Jolion | – | ৳10–15 lakh (used) |
For instance, a hybrid like the Toyota Aqua, with fuel efficiency between 25–30 km/l, offers a much lower running cost compared to a high fuel consumption vehicle such as the Toyota Land Cruiser 300, which has an efficiency of just 8–10 km/l. These differences directly impact long-term expenses beyond the initial purchase price.
Key Cost Factors Affecting Ownership
Depreciation is a major factor in ownership costs. New cars typically lose 20–30% of their value within the first three years, making well-maintained used hybrids an appealing option. For example, a second-hand Haval Jolion is available for ৳10–15 lakh, compared to the new model’s price of ৳23.79 lakh. This highlights the savings potential in the used car market.
CNG Conversion Impact
To cut down on fuel expenses, many car owners in Bangladesh opt for CNG conversions. With CNG priced at ৳43 per cubic metre compared to gasoline at ৳89 per litre, the savings on fuel costs can be substantial. However, vehicles running on bi-fuel systems often consume more energy and deliver lower fuel economy than those running solely on gasoline. While CNG is cheaper, this efficiency trade-off is something buyers need to keep in mind.
Conclusion
Fuel costs have a major impact on Bangladesh’s used car market, shaping everything from buyer preferences to resale values. In the first half of 2023, overall automobile sales saw a sharp decline of 44%, with reconditioned cars facing the steepest drop.
"Cars have become a necessity now for moving in a city like Dhaka, since public transport in this city is in shambles. So the middle class opts to buy a car as soon as they can. But [now] because of the inflation, the middle class cannot fulfil this desire." – Dr Mustafa Kamal Mujeri, Executive Director at the Institute for Inclusive Finance and Development (InM)
These changes are reshaping how consumers approach car buying. With rising fuel prices, buyers are turning to fuel-efficient options, making hybrids and electric vehicles increasingly appealing. Research shows that for petrol vehicles, a 1% increase in fuel prices results in a 0.26% drop in annual kilometres driven.
Fuel efficiency has become a key focus for Bangladeshi car buyers, as they adapt to rising operational costs. The growing interest in hybrid and electric vehicles highlights this shift toward smarter, more economical choices.
Despite the challenges, Bangladesh’s used car market is showing resilience. Valued at USD 1.50 billion in 2025, it’s projected to grow to USD 2.10 billion by 2030. This growth underscores the market’s ability to adapt and cater to the mobility demands of the country’s expanding urban population.
For the latest updates on car prices, trends, and fuel-efficient options, visit GarirNews.
FAQs
How do higher fuel prices impact the resale value of used cars in Bangladesh?
Rising fuel prices in Bangladesh have a noticeable impact on the resale value of used cars. With fuel costs climbing, the overall expense of owning a vehicle increases, making older cars with lower fuel efficiency far less attractive to potential buyers.
As a result, many buyers begin prioritising fuel-efficient or hybrid vehicles, shifting demand away from conventional used cars. This reduced interest naturally pushes resale values down even further. Since fuel expenses play a major role in vehicle ownership costs, this trend continues to reshape the second-hand car market across the country.
What are the benefits of choosing a CNG-powered car over a petrol-powered one in Bangladesh?
Opting for a CNG-powered car in Bangladesh over a petrol-powered one offers several benefits worth considering. To start, CNG is far more economical, helping you cut down on fuel costs significantly over time. For daily commuters or anyone keeping a close eye on their budget, this can make a noticeable difference.
On top of that, CNG vehicles are kinder to the environment. They release fewer harmful emissions, including CO2, which aligns well with Bangladesh’s increasing efforts to tackle urban pollution. Choosing CNG is not just about savings; it’s also a small but meaningful step towards a cleaner and healthier environment.
Another advantage is that CNG burns cleaner than petrol, which means engines in these vehicles tend to last longer and need less frequent maintenance. This can save you both time and money on repairs.
Lastly, Bangladesh boasts a widespread network of CNG filling stations, making refuelling easy and hassle-free. For those who value affordability, environmental responsibility, and convenience, a CNG-powered car is a smart choice in today’s market.
How do import trends and government policies impact the availability of fuel-efficient cars in Bangladesh?
In Bangladesh, fuel-efficient cars are becoming more accessible thanks to recent import trends and supportive government policies. One key step is the reduction of the letter of credit (LC) margin for electric and hybrid vehicles, aimed at promoting eco-friendly transport options. At the same time, restrictions on importing cars older than five years ensure that the market is filled with newer, more efficient models.
To push this initiative further, the government has introduced incentives like a 10-year tax exemption for investments in electric vehicles and reduced import duties on electric cars. These efforts are designed to encourage cleaner, more sustainable transportation options, aligning with global moves toward environmentally responsible mobility.
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