Bangladesh may miss the benefit of importing 'cheap' Russian oil for now as the country's contracts with global suppliers of petroleum products stand in the way till this yearend.
The state-run Bangladesh Petroleum Corporation (BPC) ought to continue importing oils until December this year under the existing contracts with the suppliers, a senior BPC official told the FE Thursday, while the process of sourcing Russian fuels is already instructed by government high-ups amid a global crunch.
"If the country wants to initiate oil import from Russia before December, the BPC will have to import minimum quantity of oil products from the current contractual suppliers as there is space of adding or deducting import quantity by up to 10 per cent," he says.
Besides, the BPC will have to scrutinize a number of issues which include oil specifications, vessels, demurrage, mode of import payments, currency swap, loading and unloading timings.
The BPC will also have to win approval for the Russian oil-import deal from the cabinet committee of public purchase.
Russian Rosneft Oil Company last week offered Bangladesh three-spate refined oil products-diesel, jet fuel and octane - at a cut-down rate.
The price might be as low as 35-percent-discount rate from international market rate, which might be around Tk 55 per litre, market-insiders said.
Currently, BPC is importing refined petroleum products above the international market rates, adding premium rate, as high as US$24 per barrel.
Russia previously had offered to export crude oils to Bangladesh, which could not be explored due to capacity constraints of Bangladesh's existing five-decade-old oil refinery - Eastern Refinery Ltd (ERL).
Russia is currently supplying oils to China and India at around 35-percent-lower- than-regular prices.
The BPC has contracts to import up to 3.30 million tonnes of refined petroleum products during July-December 2022, which will be 34-percent higher than the July-December 2021.
The BPC has been importing 11,30,000 tonnes of petroleum--11,90,000-tonne diesel, 160,000- tonne jet fuel, 75,000-tonne-1,25,000-tonne furnace oil, 125,000-tonne-150,000- tonne octane and 30,000-tonne marine fuel-through tendering during second half of 2022.
The state-run petroleum corporation has also been importing similar quantity of petroleum products through negotiations with more than half a dozen suppliers for July-December 2022 period.
The BPC's petroleum suppliers under term deals are Kuwait Petroleum Corporation (KPC), PETCO Trading Labuan Company Limited (PTLCL), Emirates National Oil Company (Singapore) Pte. Ltd. (ENOC), Petrochina (Singapore) Pte. Ltd, PT. Bumi Siak Pusako (BSP), Unipec Singapore Pte Ltd, PTT International Trading Pte, and Numaligar Refinery Limited (NRL).
Vitol Asia and Unipec Singapore are supplying oil products under tendering.
The BPC has 431,835 tonnes of diesel storage, which can meet demand for 32 days considering daily consumption of around 13,607 tonnes.
The country has storage of jet A-1 fuel to meet 44 days of demand and furnace oil to meet 32 days demand, it clarified.
Bangladesh produces full quantity of petrol to meet local demand, while imports 40 per cent of octane of its demand from the international market.
In July, BPC imported around 255,000 tonnes of diesel through nine cargoes, 43,000 tonnes of A-1 jet fuel through two cargoes, 24,677 tonnes of octane one cargo and 53,358 tonnes of furnace oil through two cargoes, it stated.
It will also import 218,000 tonnes of diesel through eight cargoes. In August, 25,000 tonnes of jet fuel will be imported through one cargo and 25,000 tonnes of octane through one cargo, the statement points out.