New entity likely to supply fuel to oil-run power plants

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Nizam Ahmed
The authorities concerned are mulling a proposal to set up a company to supply fuel exclusively to oil-fired power plants in the country to ease the burden of the state-owned Bangladesh Petroleum Corporation (BPC), officials said Wednesday.
The proposal submitted recently by the Bangladesh Power Development Board (BPDB) to the ministry of power, energy and mineral resources is likely to be approved soon for quick implementation, BPDB officials said.
The BPDB that monitors the activities of the power plants in both public and private sectors buys electricity from the private power plants for the national grid.
"The proposal is under active consideration of the ministry and, if everything goes well, we may see a dedicated company to procure and supply of fuel to oil-fired power plants," ASM Alamgir Kabir, chairman of BPDB told the FE.
According to the proposal, the BPDB will have 51 per cent stake in the company and the rest by interested private parties, he said.
The BPC may also have a stake in the firm, as it has a long experience in the field as the lone importer and distributor of petroleum products and crude in the country, other officials of the BPDB said.
The proposed oil company will import and supply gas-oil and high-sulphur fuel oil to both private and state-owned oil-fired power plants, and thus alleviate the burden on BPC.
The proposed company, however, will not be allowed to sell the imported oil to domestic market, where BPC will continue to maintain its absolute monopoly.
The BPC, which has so far been supplying fuel to oil-fired power plants in both the public and private sectors, recently started facing some management problems owing to poor coordination among other state-run entities of BPDB and the Bangladesh Railway.
BPC has also been facing problems in shipment of imported fuel by tanker-vessels and tank-lorries to power plants scattered across the country, officials said.
Bangladesh will continue to generate power from oil-fired plants as gas has been depleting fast and there is no chance of hitting new gas reserves in the near future.
Moreover in 2010, the energy ministry undertook an ambitious plan to generate 15,000 megawatt (mw) electricity by 2016 and 20,000 mw by 2021.
Some 24 oil-fired plants are now in operation and an identical number of new oil-fired plants are expected to come into operation by the end of the current calendar year, BPDB officials said.
Bangladesh's fuel oil imports are likely to double at 1.5 million tonnes for power generation in 2012. The BPC will also import 800,000 tonnes of gas-oil.
The total import of petroleum products and crude is expected to reach 6.5 million tonnes in the calendar year, BPC officials said.
The present administration has claimed to have added some 2,900mw of electricity to the national grid since it took office in early 2009.