The Bangladesh Shipping Corporation (BSC) has sought to be sole carrier of entire petroleum products imported by the Bangladesh Petroleum Corporation (BPC) under freight on board (FoB) system instead of the present cost and freight (C&F) system, officials said.
However, the BPC thinks that the BSC does not have adequate capacity to carry the entire 5.5 million tonnes of petroleum products. Besides, the switchover to FoB will raise the import cost.
Sources said presently the BSC carries 1.3 million tonnes of crude oil imported by the BPC through chartered vessels since it does not have befitting ships to carry petroleum products.
On the other hand, the BPC imports the rest of its total demand of 5.5 million tonnes of refined products like diesel, kerosene, octane, petrol, and jet fuel under government-to-government (GtoG) arrangement where the supplier carries the fuel oil on its own.
The BSC, in a recent letter sent to the ministry of shipping in response to a query from the energy division, said it has been carrying entire crude oil import for BPC since 1977. It said the BPC has been importing refined oil under C&F system under which the discharge of risk and title are bestowed on suppliers.
However, the BPC has to pay an additional US$35 to $40 per tonne as premium to the sellers which totals around Tk 10 billion per year, it said. If the BSC is given the task of importing refined oil under FoB system, it will be able to import oil at lower than the premium the BPC pays to suppliers.
The BSC said procurement of an oil tanker with a capacity of 34,000 tonnes is underway which may join its fleet soon. Besides, three more newly-built oil tankers are likely to join its fleet from China within next two years, which will be able to carry a significant portion of the entire refined products demand.
The shipping corporation also said neighbouring India and Pakistan have given the authority of importing fuel oil to their state agencies.
It said since the refined products are being carried by foreign vessels instead of BSC ships, a significant amount of foreign currencies are being spent in this connection.
When contacted, BPC chairman A M Badrudduja told the FE on Sunday that the BSC has no capacity to carry the entire load of fuel oil import of the country.
Presently, it carries only one-fourth of the entire fuel import through chartered vessels. Besides, it realises an additional 5.0 per cent service charge on total costs, he said.
Mr Badrudduja said the BSC carries oil in small-sized vessels. "It cannot carry oil timely when a big work order is given."
On the proposal to switch over from C&F to FoB, he said, "The BPC will have to buy insurance coverage for its imports if the system is changed. It will raise cost of products."
BSC managing director Habibur Rahman could not be contacted for his comment as he was staying aboard. Its secretary Golam Hossain could not respond to the queries as he had no knowledge about it.
According to officials, the BSC has 13 ships on its fleet. Of them one is a container ship, 10 are product carriers and two are lighterage tankers. The ships were built between 1979 and 1991, many of which need to be replaced immediately.
Established in 1972, the BSC is entrusted with the responsibility of carrying bulk cargo, food grain and crude oil, chartering vessels, providing feeder services, unloading and ship repairing.
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