Govt listing all-weather refined oil suppliers

A government move gets underway to select a pool of refined oil suppliers who will be interested to supply the fuel whenever necessary for both short and long terms to avert any exigency.

The state-run Bangladesh Petroleum Corporation (BPC) has already issued an international invitation to enlist potential suppliers for all-weather supply of refined petroleum products on a cost-, insurance and freight (CIF) or cost-and freight (CFR) basis.

For the first time that such tender has been floated amid the persistent Middle-East crisis along with restrictions on vessels over the passage of the Strait of Hormuz. The disruption has been hampering supply of petroleum products to Bangladesh, BPC chairman MdRezanur Rahman told The Financial Express on Wednesday.

Several oil suppliers already have announced 'forced majeure,' as a consequence of the oil-market volatility and several more have deferred the shipment schedules, he notes.

Currently, BPC imports around half of its refined petroleum products through tendering and another half through government-to-government negotiations with suppliers.

It never enlisted suppliers through floatation of tenders, he says, to underline the urgency stemming from the Mideast mayhem.

"With this tender we want to shortlist the competitive petroleum-product suppliers from around the world like that of liquefied natural gas (LNG) imports," says Mr Rahman, who was also chairman of the state-run Petrobangla and dealt with LNG imports.

Bangladesh prepared a list 24 suppliers to source LNG from spot market apart from its long-term and short-term suppliers, he mentions.

The enlistment process, conducted through an international request for quotation, aims to qualify suppliers for future deliveries of a wide range of refined products, he says.

Products covered under the enlistment include 50ppm-sulfur gasoil (diesel), Jet A-1 jet fuel, 180CST high-sulfur fuel oil (furnace oil), RON 95 gasoline (octane), 0.5-percent sulfur marine fuel and liquefied petroleum gas (LPG).

Deliveries would be made on a CIF basis to Bangladesh's main oil-marketing- company installations in Chattogram, the Single-Point Mooring (SPM) system at Maheshkhali, or other designated locations in the country.

Shortlisted suppliers would be required to sign a Master Sale and Purchase Agreement (MSPA), under which they may be invited to participate in future tenders for spot or term supplies.

Interested suppliers may apply either individually or as part of a joint venture or consortium, subject to meeting eligibility criteria outlined in BPC's Standard Application Document for Enlistment.

Applications are scheduled to close at 4:00pm local time on May 4.

Submitted applications must be accompanied by a non-refundable application fee of $1,000, or its equivalent in Bangladeshi taka.

Successful applicants will be required to pay a further enlistment fee prior to signing the MSPA.

Meanwhile, a reassurance comes from Energy Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) that the country will have no fuel crisis at least over the next two months due to having "sufficient reserves" of refined petroleum products like diesel, petrol, octane and jet fuel.

Joint secretary of the Energy Division Monir Hossain Chowdhury told newsmen Wednesday about the fuel situation-in the wake of fuel rows amid panic buying and hoarding.

"We have 101,385 tonnes of diesel, 31,821 tonnes of octane, 18,211 tonnes of petrol, and 77,546 tonnes of jet fuel in reserve," he says.

More refined petroleum products are coming in the country from different sources, he adds.

The state-run Eastern Refinery Ltd (ERL) is running at low feed due to scarcity of its raw material-crude oil - amid the persistent Mideast crisis and restrictions on the movements of vessel through the Straits of Hormuz, he mentions.

The government has ramped up import of refined petroleum products as backup to meet the domestic fuel demand, the EMRD official assures.

Clarifying the reason for lower capacity, he says scheduled crude-oil shipments of 200,000 tonnes in March and 100,000 tonnes in April could not be delivered.

A Saudi vessel carrying 100,000 tonnes of Arabian Light crude remains stranded at RasTanura port as could not cross Hormuz for security risks.

Another shipment from the United Arab Emirates was suspended altogether, he adds.

However, the government has secured alternative arrangements and a vessel carrying 100,000 tonnes of Arabian Light crude via a different route and is expected to reach Chattogram port between May 2 and 3.

The government has requested Saudi Arabia to supply an additional 100,000 tonnes of crude oil in May, he informs the press.

The cabinet committee on government purchase also approved direct purchase of another 100,000 tonnes of crude oil, the EMRD official further says, spelling out the government steps to keep the ERL operational.

The ERL typically refines 1.5 million tonnes of crude oil annually, meeting about 20 per cent of national demand.

During the last fiscal year, 2024-25, the refinery provided around 15 per cent of diesel, and around 12 per cent of petrol consumed across the country.

The ERL did not provide any octane last year, according to EMRD data.

The refinery also produces furnace oil, kerosene, and bitumen as byproducts.

Regarding price adjustment, the EMRD official explains that fuel prices are adjusted monthly. Future prices will be determined on prevailing market conditions.

Asked about long queues in front of petrol pumps, the official clarifies that such crowding is not occurring outside the capital.

"People are staying in the queue on panic-buying spree," he says.

Industrial demand for diesel is being met without shortages, he adds.

Besides, he adds, private importers have been allowed to bring in 1.4 million tonnes of fuel to stabilize the market further.

The EMRD has urged the countrymen not to worry given the existing reserve supply situation of petroleum products across the country.

Azizjst@yahoo.com