Two-thirds of refined oil need now to be met from Malaysia
Wednesday, 31 December 2008
M Azizur Rahman
The country is set to meet almost two-thirds of its refined oil need from Malaysia shifting its major dependence on Kuwait as it has already completed negotiation to bring in some 1.68 million tonnes of oil from Kuala Lumpur next year, officials said Tuesday.
The state-owned Bangladesh Petroleum Corporation (BPC) will pay less premium to Malaysian state-owned Petronus Trading Corporation SDNBSD (Petco) to import the refined oil compared with the existing premium rate of the Kuwait Petroleum Corporation (KPC).
Bangladesh currently imports around 3.65 million tonnes of oil annually from the international market, of which around 2.40 million tonnes are refined oil.
"As per the negotiation, the Malaysian Petco will supply 1.50 million tonnes of refined oil to the BPC in ten months from March 2009 to December 2009," Energy Secretary Mohammad Mohsin told the FE Tuesday.
Of the total oil to be imported, 1.20 million tonnes are diesel, 150,000 tonnes are jet fuel and 150,000 tonnes are kerosene
The purchase committee of the Council of Advisers Sunday approved the premium rate at $5.98 per barrel for diesel and $6.60 per barrel for jet fuel and kerosene for the import of 1.50 million tonnes of oil.
The BPC's negotiation to import 1.50 million tonnes of refined oil from the Petco is in addition to its existing agreement with this company.
As per the agreement signed in the first week of December, 2008 the Petco will supply a total of 180,000 tonnes of refined oil - 120,000 tonnes of diesel, 30,000 tonnes of jet fuel and 30,000 tonnes of kerosene - to the BPC in next two months -- January and February 2009.
The Petco has already supplied 60,000 tonnes of diesel, 15,000 tonnes of jet fuel and 15,000 tonnes of kerosene to the BPC in December 2008 as per agreement.
Petco's premium for supplying fuel from December 2008 to February 2009 is $6.25 per barrel for diesel, $6.65 per barrel for jet fuel and $6.75 per barrel for kerosene, which are higher than the latest negotiated rate.
Before the BPC's negotiation with Petco, the KPC was supplying almost 70 per cent of the country's total refined oil need in the domestic market.
"We have searched out for new fuel import sources as the KPC declined to reach an agreement in December 2008, " the energy secretary said.
Besides, the KPC's premium is now higher as it raised premiums of diesel to $6.6 per barrel from $5.4, kerosene and jet fuel to $7.0 from $5.65 and petroleum with high octane to $8.1 from the previous $7.7 per barrel.
The KPC also has imposed stringent conditions on opening letter of credit (L/C) against fuel import from the company, which has pushed the BPC into a fresh trouble.
The company refused eight shipments of fuel from April 2008 to December 2008, due to what it said improper L/C.
The KPC is now favouring L/C opening by foreign banks though it used to allow L/Cs of local banks before, the BPC officials alleged.
"The negotiation with Petco will help get fuel in less time and in less premium compared with the KPC," Mohammad Mohsin said.
The time for arrival of Petco fuel in the country's seaport will be one-third less than that from the KPC, he said.
"It has helped diversify the country's fuel import market and reduced sole dependence on the KPC," said BPC Chairman Anwarul Karim.
To meet the remaining refined oil demands of around 76,000 tonnes, after imports from the Petco, the BPC is eyeing the companies of the Maldives and UAE and the KPC, he said.
Though the KPC declined to sign an agreement in December 2008 its team is set to visit Bangladesh in January next to hold negotiation, the BPC sources said.
The country is set to meet almost two-thirds of its refined oil need from Malaysia shifting its major dependence on Kuwait as it has already completed negotiation to bring in some 1.68 million tonnes of oil from Kuala Lumpur next year, officials said Tuesday.
The state-owned Bangladesh Petroleum Corporation (BPC) will pay less premium to Malaysian state-owned Petronus Trading Corporation SDNBSD (Petco) to import the refined oil compared with the existing premium rate of the Kuwait Petroleum Corporation (KPC).
Bangladesh currently imports around 3.65 million tonnes of oil annually from the international market, of which around 2.40 million tonnes are refined oil.
"As per the negotiation, the Malaysian Petco will supply 1.50 million tonnes of refined oil to the BPC in ten months from March 2009 to December 2009," Energy Secretary Mohammad Mohsin told the FE Tuesday.
Of the total oil to be imported, 1.20 million tonnes are diesel, 150,000 tonnes are jet fuel and 150,000 tonnes are kerosene
The purchase committee of the Council of Advisers Sunday approved the premium rate at $5.98 per barrel for diesel and $6.60 per barrel for jet fuel and kerosene for the import of 1.50 million tonnes of oil.
The BPC's negotiation to import 1.50 million tonnes of refined oil from the Petco is in addition to its existing agreement with this company.
As per the agreement signed in the first week of December, 2008 the Petco will supply a total of 180,000 tonnes of refined oil - 120,000 tonnes of diesel, 30,000 tonnes of jet fuel and 30,000 tonnes of kerosene - to the BPC in next two months -- January and February 2009.
The Petco has already supplied 60,000 tonnes of diesel, 15,000 tonnes of jet fuel and 15,000 tonnes of kerosene to the BPC in December 2008 as per agreement.
Petco's premium for supplying fuel from December 2008 to February 2009 is $6.25 per barrel for diesel, $6.65 per barrel for jet fuel and $6.75 per barrel for kerosene, which are higher than the latest negotiated rate.
Before the BPC's negotiation with Petco, the KPC was supplying almost 70 per cent of the country's total refined oil need in the domestic market.
"We have searched out for new fuel import sources as the KPC declined to reach an agreement in December 2008, " the energy secretary said.
Besides, the KPC's premium is now higher as it raised premiums of diesel to $6.6 per barrel from $5.4, kerosene and jet fuel to $7.0 from $5.65 and petroleum with high octane to $8.1 from the previous $7.7 per barrel.
The KPC also has imposed stringent conditions on opening letter of credit (L/C) against fuel import from the company, which has pushed the BPC into a fresh trouble.
The company refused eight shipments of fuel from April 2008 to December 2008, due to what it said improper L/C.
The KPC is now favouring L/C opening by foreign banks though it used to allow L/Cs of local banks before, the BPC officials alleged.
"The negotiation with Petco will help get fuel in less time and in less premium compared with the KPC," Mohammad Mohsin said.
The time for arrival of Petco fuel in the country's seaport will be one-third less than that from the KPC, he said.
"It has helped diversify the country's fuel import market and reduced sole dependence on the KPC," said BPC Chairman Anwarul Karim.
To meet the remaining refined oil demands of around 76,000 tonnes, after imports from the Petco, the BPC is eyeing the companies of the Maldives and UAE and the KPC, he said.
Though the KPC declined to sign an agreement in December 2008 its team is set to visit Bangladesh in January next to hold negotiation, the BPC sources said.