Cabinet approves fuel oil import from Philippines

FE Team | Published: May 13, 2009 00:00:00 | Updated: February 01, 2018 00:00:00

M Azizur Rahman
Bangladesh will import fuel from a new source - the Philippines National Oil Company (PNOC) - from July, as the cabinet committee on government purchase approved the deal Tuesday.
The state-owned Bangladesh Petroleum Corporation (BPC) would import 1,80,000 tonnes of fuel - 1,50,000 tonnes of diesel and 30,000 tonnes of jet-fuel - from the Philippines from July - December 2009.
For importing fuel from the Philippines, the premium rate of per barrel of diesel is US$ 5.15 and $6.60 for jet-fuel, in addition to the regular oil prices in the international market.
The meeting of the cabinet committee on government purchase, chaired by its chairman and Finance Minister AMA Muhith, approved the deal between the BPC and the PNOC.
Importing fuel from the Philippines would be the first time in the country's history.
"We had negotiated with the PNOC last month to import 1,80,000 tonnes of fuel in next
six months from July," BPC chairman Anwarul Karim said.
A similar deal to import 1,50,000 tonnes of diesel during July-December 2009 from the Maldives National Oil Company (MNOC) with the premium rate of $5.15 per barrel is now pending for approval by the purchase committee, he added.
The BPC had earlier imported only once from the MNOC to tackle the fuel crisis in 2008. Then 60,000 tonnes of diesel were imported, and the premium rate was $5.19 per barrel.
A senior energy ministry official said importing fuel from these two new sources is the outcome of a government drive, launched a couple of years ago to diversify the country's fuel importing sources.
The BPC last year signed an agreement with the Malaysian state-owned Petronus Trading Corporation SDNBSD (Petco) to import two-thirds of the country's refined oil need, thus shifting its major dependence from the Kuwait Petroleum Corporation (KPC).
Under the deal, the BPC is now importing fuel from Petco, and in 2009 it would import around 1.68 million tonnes of oil.
The KPC, the country's largest fuel provider until last year, is not exporting oil to the BPC since April 1, 2009. The KPC recently informed the BPC that the company would not provide fuel to Bangladesh at least until June 2009.
Bangladesh currently imports around 3.65 million tonnes of crude and refined products annually to meet its domestic need.
The country consumes around 2.3 million tonnes of diesel, 5,00,000 tonnes of kerosene, 1,00,000 tonnes of gasoline, and 2,50,000 tonnes of jet-fuel per year.