BPCL delaying supply of fuel due to appreciation of rupee

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Jasim Uddin Haroon
The Bharat Petroleum Corporation Limited (BPCL), an Indian state-owned oil company, has been delaying supply of agreed fuel to Bangladesh following sharp appreciation of the Indian rupee against the US dollar.
The Indian Rupee appreciated by around 13 per cent recently against the greenback making export of goods cheaper outside the country.
As on October 17, exchange rate of the Indian rupee against dollar was at 39.68 rupees. It was 45.36 rupees few months back against the US dollar.
On the other hand, Bangladesh Petroleum Corporation (BPC) has been paying bank loans for opening letters of credit (L/Cs) for the purchase of the petroleum product.
However, the BPC sent a letter to the BPCL Wednesday last asking to send the agreed fuel shortly.
"We have sent a letter to the BPCL asking it to export fuel as per the agreement with the BPC and we will pursue further if it does not reply immediately," one senior BPC official told the FE Sunday.
In the meantime, three local fuel marketing companies - Padma, Meghna and Jamuna -are also failing to supply fuel, especially in the country's northern districts, over the past few months.
The country's northern districts, which have demand for around 450,000 tonnes of fuel a year mainly for irrigation purposes, is the worst hit by the delay. The deal was signed mainly to meet the demand for the districts.
Earlier in April this year, the cabinet committee on purchase approved a deal to purchase 120,000 tonnes of high speed diesel from the Indian company.
The premium for procuring the fuel was set at US$ 5.49 each barrel.
The BPCL has its own exploration plant at Nomaligorh in Assam in India and it is expected to supply the quantity in an installment of 10,000 tonnes a month for a period of one year through river route from its plant.
The two governments on May 1 extended the Inland Water-country Trade and Transit Protocol in New Delhi to facilitate the fuel export to Bangladesh through the route.
The first shipment was supposed to reach sometime in June last this year at Baghabari in Sirajganj.
The customs procedures at the BPC's Baghabari depot area have also been completed.
Earlier, the BPCL failed to send the fuel following a devastating flood in Assam in India.