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The second unit of the Eastern Refinery Ltd (ERL-2), when it goes into operation, is expected to help save $10 per barrel in petroleum prices, compared to the import cost of the finished products, according to officials.
The facility will annually produce 3.0 million tonnes of petroleum products which will be of environment-friendly and Euro-5 quality gasoline and diesel with a maximum sulphur content of 10ppm (parts per million).
The existing unit of the ERL now can process 1.5 million tonnes of crude oil.
The second unit will also further process the diesel of the existing refinery to Euro-5 quality, said a senior official at the ERL.
The unit was supposed to be established with the Bangladesh Petroleum Corporation's (BPC) own fund, but faced a setback due to fund shortage created after the Ukraine-Russia war.
Now the government will provide a 70 per cent fund as loan while the BPC will bear the rest of the total project cost of Tk 237.36 billion.
The new unit of the ERL will also produce two new products - lube base oil and sulphur - alongside raising the county's production of gasoline, jet fuel, diesel, furnace oil, and bitumen.
A recent meeting of the project evaluation committee at the Planning Commission on the progress of the project emphasised the use of local currency in case of the components to be implemented with the government fund.
The importance was given as the country is facing a severe shortage of foreign currency.
Abdul Baki, a member of the Planning Commission, at the meeting emphasised on sending timely the revised development project proposal (DPP) as the project is very important to meet the petroleum needs of the country.
The government plans to complete the construction of the second unit of the ERL by June 2027.
Bangladesh meets 80 per cent of the petroleum needs mainly by importing from the Middle Eastern countries.
The BPC this year plans to import 5.46 million tonnes of petroleum - 1.6 million tonnes crude and 3.86 million tonnes refined - from the international market to meet the domestic demand.