Russia offers Dhaka crude oil

Refinery matching prerequisite for import

FE REPORT | Tuesday, 24 May 2022

Russia offers to export crude oil to Bangladesh, at a time of global energy shortages following western sanctions and Russian blockade over Ukraine issue.

State Minister for Power, Energy and Mineral Resources (MPEMR) Nasrul Hamid unveiled the development Monday, saying that local refinery matching stands as a prerequisite.

The Russian offer was received by the state-run Bangladesh Petroleum Corporation (BPC), he told reporters on the sidelines of an event at Bidyut Bhaban in Dhaka.

Talking to the FE later the minister, however, said non-matching of the specifications of crude oil that Bangladesh refines in its sole refinery, Eastern Refinery Ltd, with that of Russia might be a big hurdle alongside the payment issue.

"We will move forward with this when a solution is found," he said.

Sources say Russian crude oil is available at much lower price than the international price of Brent crude oil, which is now hovering at around US$113 per barrel.

Many Western countries, including the United States, Britain and some other key oil buyers, banned import of Russian oil shortly after the invasion of Ukraine.

Prices of fuel oils on the world market have fallen slightly and duty-free facilities on oil imports by neighbouring India have also lowered the price, said Mr Hamid.

Bangladesh, however, is considering keeping the rate stable-neither raising or lowering it. He said this when asked whether Bangladesh was considering cuts in the prices.

He also hopes that electric buses and trains would replace oil-run public transport in order to reduce the significant impact of fuel prices on users.

"The government has planned to shut down several oil-fired power plants next year," he said.

The government will shut several oil-fired power plants next year when a number of gas-fired and coal-fired power plants will become operational, added Mr Hamid.

"The ongoing dollar crisis has impeded import but the issue has largely been resolved," he said, regarding strains on the foreign-exchange reserves and restrictions on non-essential imports.

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