State-run Bangladesh Petroleum Corporation (BPC) on Saturday received a goodwill consignment of 2,281 tonnes of high speed diesel (gasoil) loaded in 42 rail wagons from India’s Numaligarh refinery owned by Bharat Petroleum Corporation Ltd (BPCL).
The goodwill consignment of diesel of BS III Grade with 350 ppm sulphur content is an outcome of the discussion between the two governments for fuel trade.
The arrival of the consignment is a trial for implementing the 125km Indo-Bangla pipeline project meant for fuel import.
From Siliguri, the 42 wagons travelled over 516 kms on the railway line via Rangapani, Singabad, Rohonpur to Parbatipur.
Indian High Commissioner to Dhaka Harsh Vardhan Shringla handed over the diesel consignment to Prime Minister’s Power and Energy Adviser Dr Tawfiq-e-Elahi Chowdhury BB and State Minister Nasrul Hamid. BPC Chairman Md Mahmud Reza and other senior officials attended the event in Parbatipur.
Bangladesh spent around Tk 10 crore, including tax and VAT, to import the diesel from India. Dr Tawfiq-e-Elahi Chowdhury said the government financially gained from the deal considering the tariff.
“We are now negotiating with India to settle the issue of premium for implementing pipeline project and I hope we will settle the issue within the next three months,” State Minister for Power and Energy Nasrul Hamid said.
“India is looking forward to expanding the bilateral cooperation in power, energy, rail and telecommunication sectors,” Indian High Commissioner Harsh Vardhan Shringla told at the function.
BPC received this consignment of diesel having 0.03 percent sulphur content. The benchmark price of Indian diesel was similar to the price that BPC currently imports with 0.05 percent sulphur content from international market, BPC director (planning and operations) Mosleh Uddin told daily sun.
But BPC paid a premium of $7.0 per barrel to Mean of Platts Arab Gulf (MoPAG) diesel assessments on a cost and freight (CFR) basis to the Indian BPCL.
The official said BPC currently imports 0.05 percent sulphur diesel at $4.40 per barrel to Chittagong port. BPC will need to spend another $4.00 for per barrel to carry the fuel to Parbatipur from Chittagong, pushing up the price to $8.40 per barrel.
It means BPC would save $1.40 per barrel by importing from India.
But the current price would not be long lasting as the Indian counterpart wants to set a new premium structure once the Indo-Bangla fuel pipeline is installed in two to three years.
Bangladesh earlier imported diesel for a brief period and a small quantity of 3,500 tonnes from BPCL in 2007. BPC also imported around 400,000 tonnes of diesel from the Indian Oil Company Ltd during 2005-06, BPC officials said. BPC was planning to import diesel from BPCL last year, but the damage to infrastructure at the river port, from where the cargoes were set for loading, during flood in India put up obstacles.
BPC was eyeing to import around 2,000 tonnes of diesel per month. India’s state-run BPCL then backed out of its plan to export 0.05 per cent sulphur diesel to Bangladesh through river route.
Bangladesh currently imports around 3.5 million tonnes of diesel per year to meet local demand.