Oil import for 2023: BPC gets nod to buy 54 lakh tonnes

The Cabinet Committee on Economic Affairs yesterday granted Bangladesh Petroleum Corporation permission to import 54 lakh tonnes of oil next year in a bid to secure supply of the key commodity amid the Russian invasion of Ukraine and geopolitical tension.

Of the amount, state-run BPC, the sole petroleum importer and distributor, will buy 38.6 lakh tonnes of refined oil under government-to-government (G2G) arrangements.

The remaining 15.4 lakh tonnes will be imported as crude from state-owned Saudi Aramco and the Abu Dhabi National Oil Company, the committee decided, according to a finance ministry statement issued yesterday.

The officials of the BPC said the cabinet committee's approval was for importing oil only under government-to-government agreements from different countries.

"We will import more from private sources by announcing tender," said ABM Azad, BPC chairman.

He said that the approval was a kind of import limitation.

Last year, the cabinet committee approved to import a total of 74.5 lakh tonnes of oil – 58.5 lakh tonnes refined and 16 lakh tonnes crude for 2022.

Questioned, the BPC chairman told The Daily Star that last year, the figure of refined oil was based on G2G agreements and import from private companies.

The data of Chattogram Customs Office shows that during the January-September period this year, the BPC imported 11.51 lakh tonnes of crude and 50.9 lakh tonnes of refined oil, mainly diesel, jet fuel, octane, and furnace oil.

Bangladesh currently imports diesel from Singapore, Malaysia, Indonesia, the UAE, Kuwait, Thailand, and India.

A top BPC official told The Daily Star that the new approval was also for those countries. "But India may increase oil export to us."

Currently Bangladesh imports diesel from India's Numaligarh Refinery Limited on a small scale of 80,000-85,000 tonnes.

"A discussion on the import from the state-owned Indian Oil Corporation Ltd is in the final stages," said the BPC chairman.

Bangladesh imports crude oil from Saudi Arabia and UAE under G2G.

Another senior BPC official told The Daily Star that the estimate of how much to import the following year was routine work. "We estimated how much oil will be needed in the upcoming days and made the proposal to the cabinet committee."

Replying to a query, he said, the figure might increase by next year and that prices would be fixed based on the S&P Platts' rate, before including the shipment costs, premium and so on.

Bangladesh's transport sector is the main user of petroleum, accounting for 63 percent of the total annual consumption of oil, followed by irrigation, electricity generation, and the industrial sector, according to the BPC.

Bangladesh uses roughly 65 lakh tonnes of petroleum annually and imported fuel accounts for 90 percent of the total requirement, according to BPC data.

The rest is made up of gas produced locally.