State-owned Bangladesh Petroleum Corporation is facing difficulties to maintain imports of crude and refined fuel oils with the rising war in the Persian Gulf, affecting its traditional sources in the Arabian Peninsula, said Energy Division officials.
- War in Gulf interrupts 6-month imports plan
- 4 lakh tonnes confirmed by Energy Div in April
- 5 lakh tonnes monthly consumption in 2024-25
- BPC looks for emergency crude to keep ERL running
The BPC, the country’s only petroleum products importer and distributor, is struggling to maintain its six-month fuel procurement plan, approved by the advisory council committee on government purchases on January 6, 2025, to import around 30 lakh tonnes of refined and crude oils by June.
Of the amount, the BPC was scheduled to import 15 lakh tonnes of crude oils from the United Arab Emirates and Saudi Arabia for its subsidiary state-run Eastern Refinery Limited and the rest 15 lakh tonnes of refined fuel oils from seven companies in six countries such as India, China, Malaysia, the UAE, Thailand and Indonesia.
In January, the ERL was supplied with a consignment of around one lakh tonnes of crude from Saudi Arabia, but since then no crude vessel could arrive at the Chittagong port from the Gulf because of the war.
The war was initiated by a joint strike by the United States and Israel on February 28 on Iran and retaliations by Tehran on Jerusalem and the US interests in the UAE, Kuwait, Oman, Qatar, Iraq, and Saudi Arabia over the past one month have caused uncertainties in the global energy trade and price hikes of the petroleum products by around 50 per cent in March.
Iran’s almost full control over the Strait of Hormuz, a critical chokepoint on the Persian Gulf enabling 20 per cent of the global daily output, has affected the supply chain of crude and refined oils to Asian countries, including Bangladesh.
On March 25, an effort by Saudi Arabia to send a consignment of one lakh tonnes of crude was obstructed on the Strait, said Energy Division officials, adding they were now trying to bring in the consignment through the Red Sea by April 20.
To avert any suspension of fuel refining at the ERL amid the supply shortage of crude, Energy Division officials said that they were looking to import one lakh tonnes of crude from Malaysia on an emergency basis.
The diesel import from India under the annual 1.8 lakh tonnes purchase arrangement with an extra 50,000 tonnes has remained uninterrupted.
On Wednesday, Tehran assured Dhaka of allowing the passage six Bangladeshi vessels stuck in the Strait of Hormuz-- two carrying fuel oils and the four liquefied natural gas.
On Thursday, Monir Hossain Chowdhury, a joint secretary at the Energy Division, in a briefing at the secretariat said that the country’s overall fuel stock was 2,55,018 tonnes with 1,22,660 tonnes of diesel, 9,021 tonnes of octane, 12.194 tonnes of petrol, 58,736 tonnes of furnace oil, 41,876 tonnes of jet fuel, 9,378 tonnes of kerosene and 1,153 tonnes of marine fuel.
In addition, there are around 80,000 tonnes of fuel oils held in reserve for the extreme emergency.
Monir Hossain also said that 1.6 lakh tonnes of diesel would be imported in April without elaborating the schedules of the vessels.
Dismissing any fuel oil shortage, he said that there would no crisis of fuel oil.
But the sum of the fuel oils in the current stock and in the pipeline stands at around four lakh tonnes, almost one lakh tonne less than the average monthly consumption of 5.1 lakh tonnes, supplied by the BPC in the financial year of 2024-25.
Because of the supply shortage consumers have been facing sufferings because of long queues, rationing and altercations.
Power energy and mineral resource minister Iqbal Hassan Mahmood on Wednesday told New Age that there was no shortage of fuel oils.
Besides, they scaled up efforts at ensuring imports from alternative sources like Nigeria, Angola, Brunei, Australia, Russia and Kazakhstan.
He blamed the hungry consumers for the spike in demand.
Energy Division officials said that the current war had disrupted maritime traffic, forcing some 2,000 ships to remain stranded at different seas with hundreds of seafarers.
Energy Division officials further said that the BPC was expecting at least 15 vessels in the current month to be docked at the Chittagong port.
Of them, a tanker with 27,300 tonnes of diesel from Malaysia has been unloading the item since early Tuesday.
Another tanker with 30,000 tonnes diesel is expected to arrive at the port from Singapore on March 4 while a tanker with 25,000 tonnes of octane is expected to arrive on March 6.
The BPC had to import octane in recent years because of growing consumption of the item by oil guzzling jeeps run by government and corporate officials.
The ERL supplies 50 per cent of the country’s annual consumption of octane at around four lakh tonnes.
The government has also searched alternative sources and already approved three separate proposals to procure 2.6 lakh tonnes of diesel on Mach 31.
Exxon Mobil Kazakhstan INC will supply one lakh tonnes of diesel, Abeer Trade and Global Markets will supply the same quantity of diesel and PT Bumi Sial Pusako Zapin of Indonesia, also known as BSP Zapin, will supply 60,000 tonnes of the product.
But the supplies are unlikely to arrive in the current month, said Energy Division officials.
The BPC enhanced its fuel oils storage capacity from nine lakh tonnes to 13.0 lakh tonnes in 2009.
In the 2024-2025 financial year, the total import of petroleum products was 62.15 lakh tonnes at a cost Tk 50,195.14 crore equivalent to $4.1 billion, according to the relevant BPC annual report.
About 63.41 per cent of petroleum oil was used in transport sector, 15.41 per cent in agriculture, 5.96 per cent in industry, 11.67 per cent in power, 0.96 per cent for household consumption and 2.59 per cent in other sectors.
Diesel is the most consumed fuel oil accounting for 62.69 per cent of the total consumption, furnace oil 14.34 per cent, petrol 6.32 per cent, octane 5.90 per cent, kerosene 1.00 per cent and Jet fuel A-1 8.19 per cent and other 1.56 per cent.
