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Dhaka Tribune

Fuel oil import from Russia: US hints at no objection to Bangladesh

Washington should not have any objection if Bangladesh imports oil from Russia, says the energy adviser

Update : 31 Aug 2022, 11:03 PM

The United States has hinted that it will not object to Bangladesh importing fuel oil from Russia, according to the Prime Minister’s Advisor on Power, Energy and Mineral Resources Dr Tawfiq-e-Elahi Chowdhury.

He was speaking during a press briefing at the Prime Minister’s Office yesterday.

 “I had a meeting with the US undersecretary [Jose W Fernandez]. I wanted to know if there was any restriction on the import of oil from Russia. He [Fernandez] said there were no sanctions from the United States on oil, fertiliser and food. So, we can assume that there is no problem with importing oil from Russia or other sources,” Dr Tawfiq-e-Elahi said.

“There are some diplomatic norms involved in this case, but, as I understand it, things discussed at a minister-level meeting have importance,” he added.

On August 16, Prime Minister Sheikh Hasina ordered a review of oil imports from Russia during a meeting of the Executive Committee of the National Economic Council (Ecnec) 

On August 18, Dr Tawfiq-e-Elahi Chowdhury held a meeting with US Under Secretary of State for Economic Growth, Energy, and the Environment Jose W Fernandez at the US Department of State in Washington DC.

Russia has been giving discounts on its fuel oil exports since sanctions curtailed its market in the West in light of  the Ukraine crisis. China, India, and even the world's second-largest oil producer, Saudi Arabia, are making the most of the offer, purchasing cheaper Russian fuels to meet domestic demand while refining and exporting to Europe at much higher prices.

Rosneft Oil Company, a Russian state-owned fuel company, has offered to sell finished oil to Bangladesh as the South Asian country does not have the capacity to refine Moscow’s crude oil. A high-level meeting at the Bangladesh Secretariat on August 25 decided that Bangladesh would not be able to make the purchase in rubles as the country does not have a sufficient amount of the Russian currency, but the hint from the US implies imports using dollars is still possible.

When will load-shedding end?   

When asked when the government may withdraw the load-shedding measures imposed to combat the global fuel crisis, Dr Tawfiq-e-Elahi Chowdhury said: “It is a global crisis. No one can say when it will be resolved.”

He added that oil imports from Russia would not solve all problems overnight. But he also expressed the hope that the power crisis will improve from September or October.

Inflation on the rise

The increase in fuel prices has been one of the most widely discussed concerns in the country, fuelling an already high inflation and causing people to suffer greatly.

Dr Tawfiq-e-Elahi said many of the country’s current problems will be solved once the price of fuel returns to normal levels.

Replying to a query about the increase in the price of oil, he said: “If we do not increase the price of fuel oil, we have to give a subsidy from the budget. This may hamper the development of other sectors.”

Electricity generation quadruples from 2009

The prime minister’s energy advisor also stressed that electricity generation in the country has quadrupled since 2009.

“To solve the energy crisis and increase domestic fuel production, we drilled 34 oil wells in the last 5 years. Last year alone, we drilled four wells. It is not true that there was no investigation and planning in Bangladesh,” he said.

“We are not allowing anyone except BAPEX to search for resources on the territory of the country. However, Gazprom has been given work within these restrictions in Bhola,” he added.

Dr Tawfiq-e-Elahi further said LOCs are on offer for offshore gas exploration, but they have not been getting the expected response.

He also mentioned that Bangladesh may take loans from the IMF.

“There is enough money to cover four or five months of import expenses. I was hearing yesterday that reserves will increase,” he said

Energy Secretary Md Mahbub Hossain was also present at the briefing.

On August 5, the Energy and Mineral Resources Division hiked diesel and kerosene prices by 42.5% as well as petrol and octane prices by 51% in response to rising prices in the global market. The prices were adjusted on August 29 at the consumer level in response to the lowering of import duty from 10% to 5% and the withdrawal of all advance taxes on diesel by the National Board of Revenue.

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