The Bangladesh Petroleum Corporation (BPC) is set to import 110,000 tonnes of refined fuel oil from Vietnam at a moderate premium, as compared to previous contracts, for the second half (July–December) of this year.
The state-owned company have to spend around Tk633.48 crore to import fuel oil from Perolimex Singapore PTE Ltd, a Vietnam-based fuel oil export company.
Earlier, Energy Secretary M Abu Bakar Siddique sent a proposal to the cabinet committee on public purchase to import 110,000 tonnes of refined fuel oil – 30,000 tonnes of diesel and 80,000 tonnes of furnace oil – from Vietnam.
The demands for crude diesel and crude furnace oil are 1,780,000 tonnes and 530,000 tonnes respectively. However, the Eastern Refinery will refine 530,000 tonnes of crude diesel and 180,000 tonnes of crude furnace oil during the next six months, starting from July.
In the contract, the premium for diesel and furnace oil had been set at $4.80 and $34 per barrel, respectively, for the second half of this year.
The premium for furnace oil dropped by $1 per tonne to $34 during the first half of this year.
For the current fiscal year, the government had allocated Tk2,400 crore in the budget to meet the fuel oil subsidy which was more than 67% lower than the Tk7,350 crore or so spent during the previous fiscal year.
Due to civil war in Iraq, the Finance Division disbursed only Tk1,224 crore in two weeks in June to facilitate importing fuel oil. The officials concerned termed it “unprecedented.”
The BPC sought Tk2200 crore fund support from the government to import petroleum fuels and repay loans for six months from July to December this year.
“The corporation will face fund crisis in importing petroleum fuel if the government doesn’t provide this amount of money,” BPC Chairman Md Eunusur Rahman informed the Energy and Mineral Resources Division secretary last week.
Last week, the hard term loan committee gave its consent to the BPC proposal for availing of $900 million deferred payment facility from four fuel oil suppliers - $300 million from PETCO-Malaysia, $250 million from PETRO-China, $200 million from PNOC-EC and $150 million from UNIPEC-Singapore for 150 days with an annual interest rate of 3.78%, said sources.
In the budget, the government had increased the import duty on crude and refined petroleum products in FY2014-15 which might lead to a hike in petroleum prices and power tariff, finance division officials said.
The BPC is counting a loss of Tk8.12 per litre of diesel and Tk7.62 per litre of kerosene.
The BPC chairman said increase in fuel oil price in the global market would not have any negative impact on the country’s market as the import contracts were done earlier.
He, however, apprehended an adverse impact in the case of new contracts.
“We hope the Iraq crisis will come to an end before we sign new agreements with the supplying companies,” he said.
The BPC would require $2364.50 million to import 27.20 lakh tonnes of petroleum fuels for the next six months, he said.