Sixteen international organisations yesterday submitted tender documents for the import of petroleum products for Bangladesh Petroleum Corporation.
On February 11, an international tender was floated for the import, doing away with the government-to-government (G2G) negotiations, to make profits in the context of a slumping global oil market.
The tender documents will be opened on February 22.
Bangladesh Petroleum Corporation (BPC) Chairman AM Badrudduja told the Dhaka Tribune yesterday that the cost of import would either be covered from BPC’s fund or sourced from the state coffer.
He also said: “We want to procure of 9.875 million barrels [1.32 million tonnes] of import refined diesel [GASOIL] and 1.440 million barrels [180,000 tonne] of Jet A-1.”
The government believes that importing oil through international tenders will lower the premium rate, the BPC chief said.
State-owned BPC incurred huge losses after introducing the G2G system in 2003-04.
Until 2003, the BPC imported petroleum products through tenders and negotiated premium rates – transportation, insurance and other costs – every six months. Recently, it has imported refined diesel with a premium of $4.50 per barrel.
G2G negotiations came into effect in 2005. Under the agreement, BPC closed minimum two-year deals with oil companies. Before that, its losses were lower under the competitive market tender policy.
The BPC has been importing about five million tonnes of fuel oil worth about $3bn every year from 13 countries under the G2G deals. It made a profit of Tk3,500 crore in 2014-15, when oil plummeted to $40-50 per barrel from $117.
In 2011-12, it incurred a record Tk105.52bn loss. In 2003-04, the amount of loss was Tk9.6bn.
Badrudduja claimed that buying oil at high rates and selling it at low prices back home had led to the losses.