BPC: Concerns over fuel reserves unfounded

The concerns over fuel reserves are unfounded as there is no fuel oil crisis in the country, stated the Bangladesh Petroleum Corporation (BPC), adding that enough fuel is in reserve to last a month, and more have been ordered to cover the next six months.

Making the clarification at a press conference on Wednesday, BPC Chairman ABM Azad said, “Our stock of diesel will last for the next 32 days, and octane for nine more days. Oil imports for the next six months are guaranteed as well.

“Another 30,000 tonnes of diesel will reach Bangladesh on July 30. We have enough jet fuel and furnace oil to cover 44 days and 32 days respectively. No instructions have been relayed to consumers to buy less fuel oil.”

An Energy and Mineral Resources Division statement issued on the same day conveyed the same message.

A BPC official told The Business Post that three tankers carrying diesel are awaiting discharge at the Chattogram port. Regular purchase order of import is also underway. However, complications regarding the opening of LCs and paying of bills still persist.

A notification posted at a filling station in the capital on Tuesday went viral on Facebook Tuesday. It mentions allowing motorcycle riders to buy a maximum of Tk 400 worth of octane, and a Tk 3,000 worth of octane-diesel for cars.

The viral post created anxiety and widespread concerns among the public, and many believed that Bangladesh is running out of fuel oil. It should be noted that Bangladesh does not depend on imports for petrol, and meets 40 per cent of the octane demand locally.

Commenting on the issue, Bangladesh Petrol Pump Owners’ Association Secretary General Mizanur Rahman said, “We are receiving a little less supply compared to last month. But no instructions were given on how much oil should be sold. So there is no reason to panic.”

Most of the imported diesel is used in the transportation sector. Besides, diesel is also used for agricultural irrigation and power generation. The BPC sells around 45 lakh tonnes of diesel annually.

The agency also imports furnace oil for use in power plants, jet fuel for aircraft and crude oil.

The transportation sector consumes 63 per cent of the country’s total fuel oil. About 16 per cent is used in agriculture. Industrial sector uses 7 per cent and power sector 10 per cent.

An official of the BPC’s Planning and Operations Division said the agency usually imports more than four lakh tons of fuel oil every month. Meanwhile, most of the privately-owned power plants import furnace oil and diesel as well. So the private sector also has reserves of fuel oil.

According to the BPC, 16 to 17 LCs are opened every month to import fuel oil, but now, the banks are often unable to open LCs due to the ongoing shortage of USD.

The official however said the complications surrounding the payment of foreign suppliers’ bills and opening LCs to import refined fuel oil has somewhat decreased. However, banks are still taking significantly longer to process LCs due to the ongoing USD crisis.

An official of the Energy Division said if the LCs remain stuck in banks, the import of fuel oil may get disrupted. Bangladesh is currently paying its dues to foreign companies supplying fuel oil in installments.

This is also not being repaid properly due to the LC issue. Next month’s fuel oil supply is expected to come once the LCs currently stuck in banks are processed.

Sources said there are currently no complications regarding crude oil imports, because LCs for this process are opened through the Bank of Barclays in Dubai. The BPC has borrowed $1,400 million this year from Jeddah-based Islamic Trade Finance Corporation (ITFC) for this import.

‘Group with vested interest spreading false info’

In a statement issued on Wednesday, the Energy and Mineral Resources Division read, “A group with vested interest is spreading false information about fuel reserves, misleading the public.

“We strongly believe that the depots of the companies under Bangladesh Petroleum Corporation have sufficient fuel oil reserves. At present there is no shortage or shortage of fuel oil in the country. There is no danger of a crisis.”

It added, “The process of importing fuel oil for the next 6 months is in the pipeline.”

According to the Energy Division, Bangladesh currently has a stockpile of 431,835 metric tonnes of diesel which will last for 32 days, while the daily sale is 13,607 tonnes. The country also has a Jet-A-1 stock for 44 days and furnace oil stock for 32 days.

In July 2022, nine vessels delivered 255,000 metric tonnes of diesel, two vessels approximately 43,000 metric tonnes of Jet-A-1, 1 vessel 24,677 metric tons of octane and 2 vessels 53,358 metric tons of furnace oil to Bangladesh.

In August, 218,000 metric tons of diesels will arrive in eight vessels, 25,000 metric tonnes of Jet-A-1 in one vessel, 25,000 metric tonnes of octanes from one vessel.

Fuel oil will come to Bangladesh according to the import plan for the next 6 months. Of this, 50 per cent has been procured through G-to-G contract and the remaining 50 per cent through open tender.

The Energy and Mineral Resources Division has also requested relevant parties to be frugal and affordable in the use of fuel oil supplied at subsidised prices.