The Financial Express

Indian minister to visit Dhaka for diesel pipelines deal

| Updated: October 24, 2017 14:09:32

Indian minister to visit Dhaka for diesel pipelines deal

Indian Petroleum Minister Dharmendra Pradhan will soon visit Dhaka to sign an agreement with Bangladesh for diesel exports through pipelines.


Dhaka has already agreed to New Delhi's proposal for the 'India-Bangladesh goodwill friendship pipeline', which was first proposed by Prime Minister Narendra Modi during Bangladesh Premier Sk Hasina's visit to India.


The agreement is likely to be valid for 15 years with a proposition to enhance the quantity of diesel in the coming years, as Bangladesh's energy demand rises, according to a report by www.millenniumpost.in.


Meanwhile, a feasibility study for laying the 'India-Bangladesh friendship pipeline'has been completed and an MoU has been signed for the project.


The diesel will be supplied from the Numaligarh refinery, a joint venture of Bharat Petroleum, Oil India and the Assam Government.


The 130-Km pipeline will be laid from Numaligarh to Parbatipur of Dinajpur district in Bangladesh.


Out of 130 km, only five km of the pipeline will be constructed within Indian territory and the rest of it would be within Bangladesh. Both the Indian and Bangladesh governments approved the project last month.


Initially, India proposed to supply 1.0 million tonnes of diesel annually but later it was agreed that at the outset, India would supply 0.2 million to 0.4 million tonnes a year.


The figure might be increased as and when demand increases.


It has also been decided that the price of the diesel exported would be fixed at the International rate.


At present, India will supply diesel at $5 per barrel. Bangladesh now imports diesel from West Asia at a price of $2.2 per barrel.


However, it reaches the Chittagong port from where it costs another $4.5 per barrel to transport this diesel to north Bengal.


So, ultimately, it costs Bangladesh $6.7 per barrel, which is higher than the price India offers. By importing oil from India, Bangladesh can save huge foreign exchange.


Bangladesh imports an average of more than 3.0 million tonnes of diesel from different foreign companies.


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