Row over carrying fuel from Kuwait settled
Monday, 22 November 2010
FE Report
The row between Bangladesh Petroleum Corporation (BPC) and Kuwait Petroleum Corporation (KPC) over carrying petroleum products has been finally settled as the KPC has agreed not to supply fuel with older vessels, officials said Sunday.
The state-owned BPC and the KPC have reached consensus during a recently-held negotiation meeting in Kuwait under which the Gulf company will supply fuel to Bangladesh with vessels not older than 20 years.
"The KPC has agreed to our proposal and will supply fuel with vessels as per our requirement from next calendar year," a senior BPC official told the FE.
Bangladesh's Shipping Department earlier asked BPC to stop importing petroleum products using old vessels from 2011 in line with the International Maritime Organisation specifications to ensure safe environment.
An inter-ministerial meeting subsequently decided not to import oil with older vessels.
But the KPC had lobbied with the Shipping Department to continue supplying fuel to Bangladesh with vessels up to 25 years old and offered to cut premium rates further if allowed to do that.
The KPC top officials had met Director General of Shipping Bazlur Rahman in Bangladesh and some government high-ups to persuade BPC to take delivery of fuel from vessels up to 25 years old.
Bangladesh was forced by Kuwait to relax its regulations on allowing the use of vessels more than 20 years old to supply fuel in 2009.
The BPC has been allowing KPC to supply petroleum products using vessels which were up to 25 years old since July 2009 as the KPC had told BPC that it would charge higher premiums and reject letters of credit from Bangladesh's state-owned commercial banks if it failed to accept the condition.
KPC was, however, forced to take back at least two consignments of jet fuel of 10,000 tonnes each late last year as the fuel was found 'substandard.'
It subsequently replaced two cargoes.
As of now, the BPC has a deal with the KPC under which the company is to provide 520,000 tonnes of diesel at a premium of US$3.40 per barrel and 140,000 tonnes of jet fuel at a premium of $4.40 per barrel over July-December 2010.
Kuwait has been supplying diesel and jet fuel to Bangladesh under term contracts since 2003, meeting virtually all the country's annual demand.
But the arrangement foundered in 2008 when Kuwait imposed more conditions on letters of credit and suspended the shipment of eight cargoes prompting BPC to look for new sources.
BPC also imports petroleum form Malaysia's Petco, the Philippines' PNOC, the Maldives' MNOC and Egypt's Midor with vessels not over 20 years old.
The row between Bangladesh Petroleum Corporation (BPC) and Kuwait Petroleum Corporation (KPC) over carrying petroleum products has been finally settled as the KPC has agreed not to supply fuel with older vessels, officials said Sunday.
The state-owned BPC and the KPC have reached consensus during a recently-held negotiation meeting in Kuwait under which the Gulf company will supply fuel to Bangladesh with vessels not older than 20 years.
"The KPC has agreed to our proposal and will supply fuel with vessels as per our requirement from next calendar year," a senior BPC official told the FE.
Bangladesh's Shipping Department earlier asked BPC to stop importing petroleum products using old vessels from 2011 in line with the International Maritime Organisation specifications to ensure safe environment.
An inter-ministerial meeting subsequently decided not to import oil with older vessels.
But the KPC had lobbied with the Shipping Department to continue supplying fuel to Bangladesh with vessels up to 25 years old and offered to cut premium rates further if allowed to do that.
The KPC top officials had met Director General of Shipping Bazlur Rahman in Bangladesh and some government high-ups to persuade BPC to take delivery of fuel from vessels up to 25 years old.
Bangladesh was forced by Kuwait to relax its regulations on allowing the use of vessels more than 20 years old to supply fuel in 2009.
The BPC has been allowing KPC to supply petroleum products using vessels which were up to 25 years old since July 2009 as the KPC had told BPC that it would charge higher premiums and reject letters of credit from Bangladesh's state-owned commercial banks if it failed to accept the condition.
KPC was, however, forced to take back at least two consignments of jet fuel of 10,000 tonnes each late last year as the fuel was found 'substandard.'
It subsequently replaced two cargoes.
As of now, the BPC has a deal with the KPC under which the company is to provide 520,000 tonnes of diesel at a premium of US$3.40 per barrel and 140,000 tonnes of jet fuel at a premium of $4.40 per barrel over July-December 2010.
Kuwait has been supplying diesel and jet fuel to Bangladesh under term contracts since 2003, meeting virtually all the country's annual demand.
But the arrangement foundered in 2008 when Kuwait imposed more conditions on letters of credit and suspended the shipment of eight cargoes prompting BPC to look for new sources.
BPC also imports petroleum form Malaysia's Petco, the Philippines' PNOC, the Maldives' MNOC and Egypt's Midor with vessels not over 20 years old.