Fuel import from Kuwait becomes uncertain

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Jasim Uddin Haroon
The Kuwait Petroleum Corporation (KPC) has decided to stop supplying fuel to Bangladesh from April 1 as the government has not yet taken any decision relating to KPC's new conditions.
KPC, which supplies 3.8 million tonnes of fuel oil to Bangladesh, about 25 per cent of the total supply, has imposed a set of fresh conditions relating to age of shipping vessels and payment method.
KPC wants to ship the fuel oil in tankers, which are not older than 25 years while the Bangladesh government wants the shipments to be made in vessels that are maximum 20 years old.
Besides, KPC, a state-owned hydrocarbon company of Kuwait, wants the payment of fuel bills to be confirmed by a third bank that would cost a substantial amount of money.
The KPC has already communicated its decision to stop fuel supply to Bangladesh as the government had failed to take any decision during the three-month leisure period.
Sources at the BPC said the contract with the KPC ended in December last year and it extended a leisure period for three months ending March 31.
When contacted, one senior official at the Ministry of Power, Energy and Mineral Resources told the FE Sunday: "We are aware of the issue but are yet to take any firm decision on the conditions."
"We have received conditions set by the KPC, but approval of the conditions especially shipment of fuel in old vessels will be 'dangerous'," said the official.
He also said that the system loss would rise if the fuel is transported in old tankers.
BPC officials said that L/C confirmation through a third bank will also cost the state owned organisation dearly.
They said at least Tk 10 million additional costs will be incurred against each shipment if the BPC has to add L/C confirmation from a third foreign bank.
However, a senior BPC official told the FE: "We will not face any major problem even if KPC stops supplying as we have other sources."
Currently, Bangladesh is importing fuel from Malaysian national oil company Petronas.
BPC sources claimed that it has a stock of around 250,000 tonnes of diesel, octane about 15000 tonnes, jet fuel 35,000 tones and kerosene over 40,000 tonnes.