Govt okays purchase of another 1 lakh tonnes of refined diesel at $75 per barrel, two LNG cargoes
The government is importing this fuel from Kazakhstan’s Kazakh Gas Processing Plant LLP at less than half of the international market price.
The government will import 1 lakh tonnes of refined diesel fuel from Kazakhstan at $75.06 per barrel and two LNG cargoes from Singapore under the direct procurement method in response to the Middle East war and to meet urgent domestic energy demand.
The proposal was approved today (4 April) at an online meeting of the Cabinet Committee on Government Purchase, chaired by Finance Minister Amir Khasru Mahmud Chowdhury, despite it being a holiday. Siraj Ud-Doula Khan, public relations officer of the finance ministry, confirmed the information to TBS.
The government is importing this fuel from Kazakhstan's Kazakh Gas Processing Plant LLP at less than half of the international market price. Although there was a proposal to import 5 lakh tonnes of diesel from the company, the purchase committee approved only 1 lakh tonnes.
According to prices published by Arab Gulf on 1 April, refined oil was trading at over $238 per barrel, whereas Bangladesh is importing it at $75.07.
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In addition, the Cabinet Committee on Government Purchase approved a proposal to import two LNG cargoes from Singapore-based Aramco Trading Singapore Pte Ltd.
Siraj said that although the Cabinet Committee on Economic Affairs approved proposals to import an additional 15 lakh tonnes of diesel and 1 lakh tonnes of petrol from Kazakhstan, Dubai, and Oman, those were not approved by the purchase committee.
These included proposals to import 10 lakh tonnes of diesel and 1 lakh tonnes of petrol from Dubai, 4 lakh tonnes of diesel from Kazakhstan, and 1 lakh tonnes of diesel from Oman.
In a summary submitted to the purchase committee, the energy division said that due to the Middle East war, there has been unusual volatility in international fuel prices, premiums, and freight rates. Risks to maritime transport routes have increased. LNG exports from Qatar and Oman have been disrupted, leading to higher gas prices in Europe and increased demand for liquid fuel as an alternative, which in turn has intensified competition and price pressure in the global market.
"In the current unstable global situation, contracted suppliers of BPC are facing challenges in delivering fuel within the scheduled timeframes, creating a risk of disruption in the import lineup. Unipec Singapore Pte Ltd and Petco Trading Labuan Company Ltd have already declared force majeure, citing their inability to supply some scheduled parcels for April."
In this context, the energy division said that, as an exception to regular procedures, initiatives have been taken to urgently import refined fuel from alternative sources to keep the country's fuel supply system operational and stable.
Following attacks on Iran by the United States and Israel, Iran has closed the Strait of Hormuz – a route through which about 20% of the world's oil is transported. As a result, Bangladesh, like many other countries, is facing fuel supply disruptions.
To tackle the situation, the government is trying to maintain normal supply by urgently importing fuel at higher prices from various countries. However, due to low reserves, private cars and motorcycles have to wait in long queues at filling stations across the country, including in the capital, to obtain petrol and octane.
