Govt to import 17 lakh tonnes of fuel to bolster energy security as Mideast war rages

The Bangladesh Petroleum Corporation (BPC) has never before taken an initiative to import such a large volume of fuel at once. 

The amount of diesel planned for import would be enough to meet the country’s demand for about four and a half months, while the petrol would cover around 71 days of demand.

When asked about the matter, Monir Hossain Chowdhury, spokesperson of the Energy Division, told The Business Standard that the government is giving the highest priority to ensuring the country’s energy security in light of the wartime situation.

“As part of this, the initiative to import 17 lakh tonnes of fuel has been taken. The proposals will be placed for approval at the Cabinet Committee on Government Purchase meeting scheduled for Saturday,” he said.

The move comes after Iran closed the Strait of Hormuz following attacks by the United States and Israel, disrupting a major global oil transport route.

Around 20% of the world’s oil shipments pass through the strait, and the closure has triggered fuel supply disruptions in many countries, including Bangladesh.

To cope with the situation, the government is attempting to maintain supply by importing fuel from different countries at higher prices.

According to diplomatic sources, the government has requested several African countries to export petroleum products, aiming to diversify its energy sources.

Bangladesh maintains nine diplomatic missions across Africa: Algiers (Algeria), Cairo (Egypt), Addis Ababa (Ethiopia), Nairobi (Kenya), Tripoli (Libya), Port Louis (Mauritius), Rabat (Morocco), Abuja (Nigeria), and Pretoria (South Africa).

Sources said the foreign affairs ministry sent letters to these missions last month, instructing them to start negotiations for importing petroleum products. The foreign ministry, BPC, and Bangladesh’s African missions plan to hold a Zoom meeting with stakeholders on petroleum imports later this month.

Sources further said that last month, Bangladesh High Commissioner to Nigeria Miah Md Mainul Kabir met with Nigerian Minister of State for Petroleum Resources (Gas) Ekperikpe Ekpo in Abuja to request the export of petroleum products to Bangladesh.

Meanwhile, Bangladesh Ambassador to Algeria Md Najmul Huda, will meet with stakeholders in Algeria on petroleum imports. Ambassador Sadia Faizunnesa in Morocco is also exploring new avenues for petroleum supply.

However, low reserves have already begun affecting local supply. Long queues of private cars and motorcycles have been reported at filling stations in the capital and elsewhere in the country as motorists wait to buy petrol and octane.

But, State Minister for Local Government, Rural Development and Cooperatives Mir Shahe Alam yesterday reiterated that there is no fuel crisis in the country, while the fuel import and supply system is normal. 

The government has made a plan for the next three months. In addition, some new steps have been taken to save energy, which include closing the market by 6pm and reducing the expenses of ministers and secretaries by 30%, he said. 

The state minister made the remarks while talking to reporters during his visit to Mahmudul Hasan Chand Bazar in Tangail town.

The proposed purchases

According to the agenda for the Cabinet Committee on Government Purchase meeting, the government plans to import 10 lakh tonnes of EN 590 (10 ppm) grade diesel through direct procurement from UAE-based DBS Trading House FZCO.

The same company will also supply 100,000 tonnes of Gasoline 95 Unleaded (petrol).

The committee will also consider a proposal to import 100,000 tonnes of diesel with a sulphur content of 50 ppm through direct procurement from Oman-based Maxwell International SPC.

In addition, a proposal will be placed to import 500,000 tonnes of high-speed diesel (HSD), also known as automotive gas oil (AGO), from Kazakhstan’s Kazakh Gas Processing Plant LLP through the same direct procurement method.

Speaking in Chattogram yesterday, Finance Minister Khosru said the ongoing conflict in the Middle East has created a risk of disruptions to global oil and gas supply chains.

Currently, Saudi Arabia, UAE, Qatar, Kuwait, and Oman are the major exporters of petroleum products to Bangladesh, primarily through government-to-government (G2G) deals.

Since most of Bangladesh’s fuel imports come from the region, the government has been forced to secure supplies from alternative sources at comparatively higher prices, Khosru said.

“The government will not compromise on ensuring energy security. Initiatives have been taken to import oil to keep supply normal,” he said. “The government is taking all necessary measures to import oil from alternative sources, even at higher prices, to maintain fuel supply.”