The state-run Bangladesh Petroleum Corporation (BPC) has forfeited (moved to forfeit) a performance guarantee (PG) worth around US$ 1.697 million (Tk 212.21 million) from a contracted oil supplier for the latter's failure to supply diesel as per schedule.
The BPC sent a letter to Shahjalal Islami Bank PLC to forfeit the PG of PetroGas International Corporation, USA as the company could not supply 125,000 mt of refined oil combined -- 100,000 mt of diesel and 25,000 mt octane -- as per the schedule of July 5-7, a senior BPC official told The Financial Express on Thursday.
The state-owned oil corporation had issued a notification of award (NOA) to PetroGas under direct purchase method (DPM) on March 16 last and subsequently inked a deal with the company to purchase fuel as per the bilateral negotiations when the Middle East crisis was in peak and restrictions on shipping through the Strait of Hormuz was strict. Subsequently, GCG Global Commerce Gateway Ltd provided the PG with the Shahjalal Islami Bank on behalf of the PetroGas International Corporation on April 12.
Later, PetroGas named The City Bank PLC as their nominated bank to open a letter of credit (LC) to supply fuel.
But the credit report of the oil supplying company came out as negative when The City Bank PLC collected the report from two credit rating companies-Creditlink Limited and Dun & Bradstreet (D&B), said the BPC official.
According to informed sources, the BPC had issued NOAs to more than a dozen of new suppliers under the DPM when the country was facing problems importing oil products due to the Middle East war.
Only several newly awarded companies including the PetrGas could deposit the required performance guarantee (PG) as part of the contract under the DPM to supply petroleum products to BPC.
But none of them could supply oil to the country during the crisis period, it was learnt.
Some companies declined to submit the PG even after securing contracts, while others failed to proceed with supply arrangements after receiving the NOAs.
The BPC, however, could improve the country's fuel supply situation to normalcy following increased imports from regular oil suppliers, BPC Chairman Md Rezanur Rahman said.
The regular suppliers that had previously deferred oil cargoes or declared force majeure after the outbreak of the war had now resumed deliveries to BPC, he said.
As a result, the country's overall petroleum product imports have increased since early April, improving fuel supply and distribution across the country, he said.
Bangladesh has long been importing crude oil from Saudi Aramco and Abu Dhabi National Oil Company.
The BPC also imports half of the required refined petroleum products through government-to-government arrangements from suppliers including Kuwait Petroleum Corporation, PETCO Trading Labuan Company Limited, Emirates National Oil Company (Singapore) Pte Ltd, PetroChina (Singapore) Pte Ltd, PT Bumi Siak Pusako, Unipec Singapore Pte Ltd, PTT International Trading Pte, Numaligarh Refinery Limited and OQ Trading Limited.
It usually imports the remaining half of the required petroleum products through open tender method (OTM).
Azizjst@yahoo.com
