No cut in fuel oil prices now despite fall in int\\\'l market

The government is not considering any reduction in the prices of petroleum products in the domestic market now, although their prices slumped to four-year-low in the international market, said sources.
"Currently we are not considering cutting the prices of petroleum items here though the prices have slumped significantly in the international market," a senior official of the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources told the FE Sunday.
He, however, said if the current trend in the petroleum prices continues in the international market for some more months, the government might consider a price cut in the domestic petroleum prices.
The price of Brent crude oil, the major trading classification of sweet light crude oil that serves as a major benchmark price for purchase of oil worldwide, slumped to below US$70 per barrel, its lowest level since 2010.
In continuation of the downtrend, international oil prices slumped to a new low last week, as the Organisation of Petroleum Exporting Countries (OPEC) decided not to cut oil production.
Twelve members of the organisation decided on Thursday to keep their daily oil output at 30 million barrels despite a major oversupply that has caused oil prices to fall more than 30 per cent.
As the consequence, the diesel import cost of the state-owned Bangladesh Petroleum Corporation (BPC) fell by 31 per cent to $82 per barrel on November 28, from $119 per barrel in July, said a senior BPC official.
BPC's diesel import is more than half of its total import of around 5.40 million tonnes of petroleum products in the current calendar year. It has been importing around 3.0 million tonnes of diesel on an average during the past several years.
Besides, BPC's furnace oil import cost slumped by 31.40 per cent to $413 per tonne on November 28 from $602 per tonne in July, said the BPC official.
It imports around 1.0 million tonnes of furnace oil from the international market, which is the second highest quantity of petroleum products.
Prices of other petroleum products, including A-1 jet-fuel, kerosene, petrol and octane, also dropped significantly in the international market, he added.  
"We are making profit against sale of all petroleum products, as their price in the international market fell sharply," BPC Chairman Md Eunusur Rahman told the FE Sunday.
He said if the downtrend of petroleum prices in the international market continues for the next several months, BPC could recover its losses, incurred in the previous years. The corporation currently has outstanding debts worth around Tk 40 billion.
State flag carrier Bangladesh Biman owes Tk 11 billion to BPC, as its outstanding oil prices are piling up. BPC owes Tk 15 billion to state-run Petrobangla.
The BPC chairman also said the corporation has set a target to import around 5.81 million tonnes of petroleum products next year, up 7.50 per cent from the current calendar year, at a cost of around US$ 5.0 billion.
Of the total requirement, it has finalised contracts to import around 3.60 million tonnes of refined petroleum products from nine different suppliers of the middle-east and south-east Asia.
BPC has deals with Kuwait Petroleum Corporation (KPC), Petco - the trading arm of Malaysia's Petronas, Emirates National Oil Company (ENOC), the Philippines National Oil Company (PNOC), PetroChina, Unipec Singapore Ltd, Vietnam's Petrolimex, Indonesia's PT Bumi Siak Pusako, and Brunei's PB Trading to import refined petroleum products until December 2015.
It also expects to import around 1.40 million tonnes of crude oil from Saudi Aramco and Abu Dhabi National Oil Company throughout the year.
BPC's oil import has been increasing steadily over the past several years to meet the rising local demand, especially for oil-fired power plants.
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