State-run Bangladesh Petroleum Corporation, or BPC, will import around 20 per cent lower quantity of refined petroleum products during July-December by negotiating with suppliers as the coronavirus has dented domestic demand.
The corporation will purchase around 1.12 million tonnes or 0.005 per cent sulfur gasoil, or diesel, jet A-1 fuel, 180 CST high sulfur fuel oil, or furnace oil and 95 RON gasoline, or octane in H2, 2020, said a senior official.
It has already wound up negotiations with seven suppliers to import around 8.93 million tonnes of sulfur gasoil, 110 tonnes of jet A-1 fuel, 60,000 tonnes 180 CST HSFO, of furnace oil, and 60,000 tonnes 95 RON gasoline, he said.
The suppliers include Unipec Singapore of China, PT Bumi Siak Pusako Zapin of Indonesia, Emirates National Oil Company, PETCO Trading Labuan Company Ltd, the global trading arm for petroleum products of Petronas, Malaysia, Petrochina (Singapore) Pte Ltd, PTT International Trading of Thailand and Bharat Petroleum Corporation Ltd.
As per the negotiations of gasoil imports by BPC, Unipec is expected to supply 340,000 tonnes of gasoil, Zapin 180,000 tonness gasoil, PETCO will supply 150,000 tonnes of gasoil, Emirates 120,000 tonne gasoil, Petrochina 60,000 tonnes gasoil, and PTT will supply 30,000 tonne of 0.005 per cent gasoil.
The BPC will source 50,000 tonnes A-1 jet fuel from Unipec, 30,000 tonnes from PETCO, and 30,000 tonnes from Zapian during the second half of the year.
Zapian will supply 60,000 tonnes of 180 CST high sulfur fuel oil with 3.5 per cent sulfur, and 60,000 tonnes 95 RON gasoline to the BPC during July-December.
The corporation will also be importing 13,200 tonnes of gasoil from Numaligarh refinery, a subsidiary of the Bharat Petroleum during the second half.
Unlike the previous years, Bangladesh's major refined oil supplier Kuwait Petroleum Corporation, or KPC, will not supply any refined oil during the period.
KPC expressed its unwillingness to supply refined oil during July-December period asking for negotiations, BPC director for operations Syed Mehdi Hasan said.
It is also not supplying refined oil during January-June period, finding the rate offered to KPC for gasoil assessment to be unsatisfactory, BPC officials said.
The BPC imported around 1.53 million tonnes of refined petroleum from eight suppliers, including KPC during July-December 2019.
The ongoing coronavirus pandemic and subsequent shutdowns have reduced consumption of petroleum products in the country.
The BPC has already deferred nine oil cargoes of April and May due to lower domestic demand and limited storage capacity of oil products.
Despite lower-than-expected consumption, BPC, however, is still racking up profits as the domestic oil prices are lower than those in the international market.
"We shall be able to make more money if we can sell more petroleum products," BPC chairman Md Shamsur Rahman said.
To ensure more profitability, normalcy in life is required and the pandemic and resultant phobia must go, he added.
BPC's daily profit was around Taka 240 million ($2.85 million) on an average during March 9-25, before the countrywide enforced lockdown.
The corporation recorded a profit of around Taka 17 per litre in gasoil trading from the retail sector and Taka 6.0 per litre in furnace oil products trading during this period, Mr Rahman said.
The current domestic oil price was fixed by the government around four years back through an executive order, slashing prices of major oil products by up to 10.41 per cent. Since then the domestic oil price has remained unchanged.
Currently, the pump price of 95 RON gasoline and 92 RON gasoline, or petrol, is Taka 89 per litre and Taka 86 per litre, respectively, while the price of 0.05 per cent sulfur gasoil and superior kerosene is Taka 65 per litre. The price of HSFO is Taka 42 per litre.
Before 2016, the government made changes on January 4, 2013, when it raised the prices by as high as 11.47 per cent to offset BPC's losses at that time.
