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State-run Bangladesh Petroleum Corporation, or BPC, is set to cease imports of petroleum products in May as the ongoing nationwide shutdown to combat the coronavirus pandemic has dented domestic demand and inadequate storage facility.
The country's shutdown, which will last until April 14 restricts almost all types of transportation including air, rail, public transport as well as movement of private vehicles with the exception of some critical travel services being offered during this period.
The BPC is the sole importer of all petroleum products in Bangladesh except high sulfur fuel oil, or HSFO, and usually imports around 6 million tonnes of petroleum products annually including 1.4 million tonnes of crude oil.
Currently BPC has oil storage to meet 39 days of domestic demand, which is almost saturation level of its capacity.
If it continues importing oil there will be no place to store.
BPC could not cease importing oil in current month as the import orders for this month's vessels had already been placed.
The country's only crude oil refinery--Eastern Refinery Ltd --that is also a BPC subsidiary will operate at a lower capacity to cope with lower consumption of petroleum products, BPC chairman Md Shamsur Rahman told the FE.
He, however, did not say the quantity of output cut. The installed capacity at ERL, established in 1968, is 1.5 million tonnes or 30,000 barrels per day.
Currently, it has a de-rated refining capacity of around 1.4 million tonnes per year.
The ERL mainly produces 0.05 per cent sulfur gasoil or diesel, 92 RON gasoline, or petrol, 95 RON gasoline, or octane, A-1 jet fuel, superior kerosene, LPG, or liquefied petroleum gas, naphtha and bitumen from crude oil and sells it in local market through BPC's subsidiary marketing and distribution companies.
Despite a fall in consumption, the BPC is counting profits riding on the slump in global oil prices due to the spread of COVID-19globally.
BPC's profits, however, fell to around Tk 80 million per day since March 26, when the government enforced the countrywide shutdown, as the consumption of all types of petroleum products including 0.05 per cent sulfur gasoil, 180 CST high sulfur fuel oil, A-1 jet fuel, 95 RON gasoline, 92 RON gasoline, declined by around one-third to around 7,000 tonnes per day.
During the pre-shutdown period, the daily profit of the BPC ranged around Tk 240 million, or $2.85 million, from March 9 to March 25.
The corporation is currently counting profits of around Tk 17 per litre in gasoil trading and Tk 6.0 per litre in kerosene product trading as the consequences.
If the current downtrend in oil prices in the international market continues, the BPC will be healthier fiscally after Bangladesh's lockdown period, said Mr Rahman.
Bangladesh's domestic oil price is regulated by the government through executed order, which usually does not reflect the price movement in the international market.
The country is entirely dependent on imports to meet the country's domestic petroleum demand.
Currently, the pump price of 95 RON gasoline and 92 RON gasoline is Tk 89 per litre and Tk 86 per litre respectively, while the price of 0.05 per cent sulfur gasoil and superior kerosene is Tk 65 per litre.
The price of HSFO is Tk 42 per litre.