Iran won't block Bangladesh oil tankers

Infographic: TBS

Iran has agreed to provide Bangladeshi oil ships with safe passage as the Bangladesh government has intensified efforts to maintain a stable fuel supply through multiple strategic measures amid escalating conflict in the Middle East.

Bangladesh has sought assurances from Iran for the safe passage of its oil and LNG-carrying vessels through the Strait of Hormuz as escalating conflict in the Middle East threatens one of the world's most critical energy shipping routes.

Iran has agreed that Bangladeshi ships will be allowed to pass through the strategic waterway after notifying Iranian authorities before entering the strait, energy officials said, easing immediate concerns over the country's fuel supply.

Meanwhile, a vessel carrying 27,000 tonnes of diesel arrived at Chattogram port from Singapore yesterday, and four more ships carrying 1,20,205 tonnes of fuel are scheduled to arrive at the port later this week, energy officials have said.

They said to meet April's demand, the Ministry of Power, Energy and Mineral Resources has begun the process of importing 3 lakh tonnes of diesel from alternative sources through direct procurement.

An official said Bangladesh is planning direct procurement outside long-term contracts, as deliveries under existing agreements have become uncertain following the war.

Under normal circumstances, the country's daily diesel demand is 12,000 tonnes, but the government is currently supplying 9,000 tonnes per day. If the current supply continues, the five incoming shipments totalling 147,205 tonnes will cover 16 days of national demand.

On Monday morning, Mohammad Arif Sadek, the ministry's public relations officer, confirmed the arrival of a fuel vessel at Chattogram port and said another ship was  expected on Monday night.

China and India signal support 

India and China have also expressed willingness to assist Bangladesh in supplying fuel. Finance Minister Amir Khasru confirmed seeking cooperation from India and China to ensure energy security, stating: 

India, China show interest in providing fuel support to Bangladesh

"Not only India and China, we have approached several countries to secure fuel supplies and maintain communication with them. There is no reason for a fuel crisis."

After a meeting with Finance Minister Amir Khasru Mahmud Chowdhury and Energy Minister Tuku yesterday, the ambassador China Yao Wen confirmed his country's interest in supporting Bangladesh.

After the meeting, Yao Wen said Bangladesh and China will work together to resolve fuel issues, and China is eager to provide fuel assistance.

Option to import more diesel from India

Under an existing agreement between BPC and India's Numaligarh Refinery Limited, the Indian state-owned refinery is scheduled to supply 180,000 tonnes of diesel annually through the India-Bangladesh Friendship Pipeline.

Of this volume, around 120,000 tonnes have already been confirmed, but Bangladesh still has the option to import an additional 60,000 tonnes depending on its demand.

According to BPC officials, the additional supply being explored would mainly cover the last week of March and the entire month of April, as two diesel cargoes scheduled for early March failed to arrive within their delivery windows.

Monir Hossain Chowdhury, Joint Secretary (Operations) of the Energy Division, told TBS that several suppliers have proactively offered to sell fuel to Bangladesh. The BPC will review these offers and forward them to the ministry for approval.

4 more tankers due this week

Port sources said tanker Xiu Chi, carrying 27,204 tonnes of diesel from Singapore, entered Chattogram port yesterday. Shipping agents said four more diesel tankers are scheduled to arrive in the coming days.

Another tanker, Lian Huan Hu, was expected to reach the port last night from Singapore with nearly 30,000 tonnes of diesel. The tanker SPT Themis is scheduled to arrive on Thursday carrying 30,484 tonnes.

Tanker carrying 27,000 tonnes of diesel reaches Ctg Port, 4 more due this week

Two additional vessels – Raffles Samurai and Chang Hang Hong Tu – are expected to reach the port on Saturday, each carrying around 30,000 tonnes of diesel.

Nazrul Islam, managing director of Pride Shipping, the local agent for the four tankers, told TBS that the vessels are expected to arrive within a week according to schedule.

Emergency imports under consideration

Amid supply uncertainty, the government has moved to secure around 300,000 tonnes of diesel from alternative suppliers outside its existing long-term contracts.

Officials said the fuel will be procured through the direct procurement method (DPM) to expedite the process. Discussions are currently underway with several North American suppliers to arrange emergency diesel shipments.

Speaking to TBS on Sunday, Energy Secretary Md Saiful Islam said the government is exploring every available option to ensure adequate diesel supply for April. 

"So far we don't have that many problems in March. Keeping the supply uncertainty from long term contracts, we are exploring all sources to ensure around 3 lakh tonnes of diesel under DPM so that there is no disruption in the supply chain," he said.

Regarding when the supply will be confirmed from alternative sources, the energy secretary said, "We are trying to confirm delivery as soon as possible."

The authorities began exploring alternative sourcing options early, anticipating the lengthy approval process required for emergency purchases.

"There is an approval process involving the government's purchase committee. That is why we started the process earlier," Saiful Islam said.

Currently, Bangladesh imports refined petroleum products from eight countries – Malaysia, the United Arab Emirates, China, Indonesia, Thailand, India, Oman and Kuwait.

However, officials noted that a significant portion of petrol and octane is produced locally, helping reduce reliance on imports for these products.

Import disrupted

According to a fuel import scenario prepared by BPC on 7 March and presented before Prime Minister Tarique Rahman, the country planned to import 293,000 tonnes of diesel in March.

However, around 60,000 tonnes of diesel cargoes have either been deferred or cancelled, raising concerns about supply stability.

In its briefing to the prime minister, BPC noted that despite having contracts with suppliers from both the Near East and the Far East, geopolitical developments have made fuel supply increasingly uncertain.

In one instance, Singapore-based Vitol Asia cancelled a scheduled octane shipment for March, citing geopolitical risks in the Middle East.

According to BPC data as of 7 March, Bangladesh currently has 129,000 tonnes of diesel in reserve, which is enough to meet demand for around 14 days. The country also has 23,000 tonnes of octane, sufficient for about 25 days, and 15,000 tonnes of petrol, enough for roughly 15 days.

In addition, BPC reported 67,000 tonnes of furnace oil in reserve, which could last about 49 days, while Jet A-1 aviation fuel reserves stand at around 60,000 tonnes, also enough for roughly 49 days.

Mobile courts launched nationwide

To ensure uninterrupted fuel supply, the Cabinet Division has instructed all deputy commissioners to operate mobile courts across the country. This directive was issued in a letter from the Cabinet Division on Monday.

District authorities have been directed to take necessary measures accordingly.

Additionally, the Bangladesh Petroleum Corporation (BPC) has established central and regional monitoring and control cells to closely track fuel supply, maintain market stability, and resolve complaints promptly.

Special attention is being given to ensure that fuel supply for irrigation during the ongoing Boro season is not disrupted.