Fuel oil import to drop 24pc in H1, 2020

State-owned Bangladesh Petroleum Corporation (BPC) will import around 1.06 million tonnes of refined fuel oil during a period from January to June (H1) in 2020.

The purchase from open market through tendering process would be 24.28 per cent lower than 1.40 million tonnes imported in the corresponding period of this year.

The BPC is now receiving bids from global suppliers to import the oil products include diesel, jet fuel, furnace oil and octane to meet the domestic demand, a senior BPC official told the FE on Tuesday.

He said the import would reduce substantially in the next several months due to reduced consumption in the oil-fired power plants and irrigation pumps owing to the import of LNG (liquefied natural gas).

Some dual-fuel power plants those were running on diesel are now operating on natural gas as the consequence, he added.

BPC intends to import the petroleum products under four groups, namely Group A, Group B, Group C and Group D on CFR (cost and freight) basis at Chattogram port.

Under Group A, the selected international oil supplier would provide 390,000-450,000 tonnes of diesel and 60,000 tonnes of jet fuel.

Under Group B, the selected international oil supplier would provide similarly 370,000-430,000 tonnes of diesel and 50,000 tonnes of jet fuel.

For group C, the selected supplier would provide around 40,000 tonnes of furnace oil and under Group D, the selected international oil supplier would provide around 30,000 tonnes of octane.

To take part in the bidding, the bidder must own a crude oil refinery having a refining capacity of at least 3.0 million mt a year while annual turnover of the bidder must be a minimum of US$ 3.0 billion.

The interested bidder must have to have experience of satisfactorily completing export of at least 2.0 million tonnes of petroleum products annually over the past three years.

The oil suppliers will be able to submit bids either for any of the four, three, two or all the groups.

The bid submission deadline is November 25 and the offer validity would be until March 24, 2020.

Currently, BPC has been importing diesel from Unipec at a premium of $2.66 per barrel to Mean of Platts Arab Gulf (MoPAG) diesel assessments for H2, 2019 on a CFR basis under tendering system.

It has been importing jet fuel at a premium of $3.66 per barrel to MOPAG jet fuel assessments on CFR basis, from Unipec Singapore Pte Ltd during H2, 2019.

BPC has been importing furnace oil at a premium of $24.88 per tonne to MOPAG assessments for furnace oil and octane at a premium of $4.10 per barrel to MOPAG assessments for octane from Vitol Asia during H2 2019.

BPC usually imports annually around 3.5 million tonnes of diesel, 2.0 million tonnes of furnace oil, 350,000 tonnes of jet fuel to meet the local demand.

The state-run oil corporation sources around half of its refined oil products through open tender and the remaining half through government-to-government negotiations.

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