Bangladesh’s fuel imports to rise in 2012

Reuters August 6, 2012

Bangladesh is likely to import as much as 600,000 tonnes of fuel oil in the second half of this year as it shifts focus to oil-fired power generation to fight electricity shortages, an official of the Bangladesh Petroleum Corporation said on Monday.

BPC, the country’s sole oil importer and distributor, imported around 316,000 tonnes of fuel oil in the first half of 2012 and in 2011 imported a total of 665,000 tonnes.

“Fuel oil imports will go up during second half as the government now wants all power plants to run at full capacity,” said, the official who asked not to be identified as he was not authorised to talk to the media.

A shortfall of natural gas supplies forced the country to turn to costly oil-fired power plants. However, early this year the government slowed imports of fuel oil to trim its subsidy bill and boost foreign exchange reserves.

Until September, BPC will import 180-centistoke (cst) fuel oil at a premium of $40.80 per tonne to Singapore spot quotes — the premium set for the first half.

Negotiations would start in September to fix the premium for fuel oil for the rest of the year, the official said.

Bangladesh buys fuel oil from a number of national oil companies including Malaysia’s Petronas, Philippines National Oil Company (PNOC), Emirates National Oil Company (ENOC), Egypt’s Middle East Oil Refinery, Vietnam’s Petrolimex, Maldives National Oil Company.

(Reporting by Ruma Paul)