Non-settlement of risk issues delays diesel import from India

Non-settlement of the risk issues over transportation of diesel from India's Shilghat river port to Bangladesh's Baghabari is delaying import of the petroleum fuel through river route, said officials.
India wants Bangladesh to take delivery of diesel from its Shilghat river port and shoulder the responsibility of carrying the fuel up to Baghabari river port inside Bangladesh, a senior official of Bangladesh Petroleum Corporation (BPC) told the FE Tuesday.
India's demand runs counter to the existing international norms in petroleum trading, according to the official.
If agreed upon such terms, Bangladesh would have to bear additional expenses of insurance to cover any risk during the diesel transportation through waterway.
Also, the evaporation and transportation loss of diesel at the time of carrying it out from India into Bangladesh would go into the importer's account.
Thus Bangladesh would have to count an extra cost as it would have to pay for a larger quantity of diesel while finally getting lesser on account of losses stemming from transportation and evaporation.
"We have protested the Indian stance and requested them to follow international norms in fixing the 'risk and title' to facilitate the diesel import," he said.
'Risk and title' is a part of terms and conditions set for international trade in oil products, the official explained.
Under the existing universal norms, the petroleum-exporting countries load oil products from their ports and the importing countries
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receive the consignments at   their ports.
The risks, while carrying petroleum, and the losses from evaporation and transportation are go to the account of the petroleum-exporting countries, said the official.
"We have been importing around 6.0 million tonnes of petroleum products from different sources of international market every year following the international norms," the official added.
Bangladesh and India earlier had agreed on Bangladesh's import of diesel from neighbouring India through the Brahmaputra river by small barges until completion of construction of the first cross-country pipeline to carry petroleum.
Bangladesh's state-run BPC intends to import cleaner diesel with 0.05 per cent sulphur from India's Numaligarh refinery owned by Indian state-run Bharat Petroleum Corporation Ltd (BPCL).
The BPC plans to import around 2,000 tonnes of diesel per month until the building of the proposed 130-kilometre Indo-Bangladesh pipeline.
     The premium rate for the petroleum import would be fixed after settling the terms, said officials.
Bangladesh earlier had imported diesel for a brief period from the BPCL in 2007, amounting to a small quantity of 3,500 tonnes.
The BPC had also imported around 400,000 tonnes of diesel from the Indian Oil Company Ltd during 2005-06.
The corporation currently imports 0.05 per cent sulphur diesel at a premium of US$4.60 per barrel, starting from this past January until June.
 The BPC expects to start importing Indian gasoil within next several months on completion of negotiations over the premium rates, he said.
It expects to continue importing the gasoil until 2016 when, it believes, the proposed pipeline would be ready for operation.
Bangladesh and India is set to establish a joint venture (JV) firm to build the first-ever onshore pipeline between the two neighbouring countries in South Asia to carry petroleum products from India's Numaligarh refinery to Bangladesh.
    The BPCL and the BPC have already inked a memorandum of understanding (MoU) to establish the JV firm to lay down the cross-country oil-carrying pipeline. The planned joint venture would build the pipeline and carry out its operation and maintenance.
    mazizur.rahman@outlook.com