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Diesel import from neighbouring India has drop by almost half due to capacity limitation of Bangladesh Railway (BR).
State-run Bangladesh Petroleum Corporation (BPC) could now import only two rakes of diesel per month from Numaligarh refinery of Assam through railway instead of usual four rakes per month as the consequence, a senior BPC official told the FE.
Over the past several months, Bharat Petroleum Corporation Ltd (BPCL) of India has been requesting the BPC to import 50 wagons of diesel from its Numaligarh refinery in one rake.
But the BPC has so far denied it saying that it has no capacity to import 50 wagons of diesel in one-go due to the capacity constraint of Bangladesh Railway (BR) engines.
The BPC has been importing diesel from Indian border to Parbatipur through 42-wagon rake since the initiation of diesel import from the Numaligarh refinery in October 2017, said the BPC official.
BPC wrote a letter recently to BR, requesting it to make arrangement for bringing 50-wagon rake.
The BPCL has already informed the BPC not to supply over two rakes of diesel if the BPC continues importing diesel with the 42-wagon rakes, he said.
The Indian company, however, intends to supply four rakes of diesel if the BPC imports through 50-wagon rakes, the official added,
The BPCL argued that it has to pay carrying cost for a 50-wagon rake to West Bengal Railway in every consignment, no matter if it carries a full 50-wagon rake or less.
Since inception of the diesel import from Numaligarh refinery, the BPC has been taking supply of diesel through 42-wagon rakes in line with an agreement, said the BPC official.
India's BPCL has long been carrying diesel from the Numaligarh refinery to Bangladesh border through West Bengal Railway and the BPC has been carrying the petroleum product through BR to its Parbatipur oil depot in the country's northern region.
If India wants to export more diesel, the BPC would require entering into a new agreement, the BPC official added.
Presently, Bangladesh imports around 4,400 tonnes of diesel every month from the Numaligarh refinery of Assam, owned by the BPCL, through two consignments -- 2200 tonnes in each consignment.
But the BPC can import four consignments of diesel every month under the agreement between the BPC and the BPCL.
The BPC pays a premium rate of US$ 5.50 per barrel on CFR basis to import Indian diesel from the Numaligarh refinery meaning the BPCL have to carry the petroleum product to Parbatipur oil depot at its own expense.
Indian diesel is being consumed by clients around Parbitupur localities.
To meet the domestic demand, BPC currently imports around 4.5 million tonnes of diesel annually.
About a decade back, the BPC had imported diesel of a small quantity of 3,500 tonnes from the BPCL for a brief period in 2007.
The BPC had also imported around 400,000 tonnes of diesel from another state-run firm of India, Indian Oil Corporation Ltd. (IOCL), during 2005-06.
Officials said, separately, the BPC and the BPCL are working together to build a 130-kilometre cross-country pipeline to trade diesel.
The BPCL will bear the entire costs for the construction of the pipeline and the BPC will import diesel through the pipeline at least for 15 years.
Bangladesh is eyeing to import around 1.0 million tonnes of diesel annually through this pipeline.
The premium rate for importing gasoil through this pipeline would be $ 5.50 per barrel on CFR basis.
IOCL has recently offered to export around 5,000 tonnes of diesel to the BPC's newly built oil depot at Mongla every month using waterways.