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Indian Oil Corporation (IOC) is set to be a major supplier of refined petroleum products to Bangladesh as it emerged as the best bidder to supply half a million tonne oil on close of a BPC tender.
Indian state-run IOC is expected to supply cleaner diesel to the tune of 430,000 tonne, jet fuel 50,000 tonne and octane 30,000 tonne, a senior Bangladesh Petroleum Corporation (BPC) official told the FE on Monday.
This is the BPC’s first tender to import cleaner diesel having 50 parts per million (PPM) sulfur, he said.
Currently, the BPC has been importing 500 ppm sulfur diesel. Specimens of other petroleum products, however, remain the same.
The BPC floated tender on May 7, with a deadline to submit bids by May 17.
BPC intends to import upto 1.040 million tonne of 0.005 per cent sulfur gas oil, or diesel, jet fuel, furnace oil and octane combined through tender during July-December 2020, which is 22.67 per cent lower than H2, 2019.
The IOC offered best bid to supply almost half of the total petroleum products to the BPC.
Seven global firms have submitted bids on close of the bid submission deadline Sunday to supply the BPC upto 870,000 tonnes of diesel, 120,000 tonnes of jet fuel, 20,000 tonnes of furnace oil, and 30,000 tonnes of octane.
Apart from the IOC, the other firms that submitted bids are – PetroChina, Unipec, PTTP, ENOC, Vitol Asia and Puma.
BPC will evaluate their bids soon and place it to the board and subsequently will send it to the cabinet committee on public purchase for final approval, said the official.
It will import less petroleum products as the ongoing nationwide shutdown to combat the coronavirus pandemic has dented domestic demand amid insufficient storage facility.
BPC already deferred nine oil cargoes of Aprul and May, BPC director for operations Syed Mehdi Hasan said.
The country's shutdown, which is expected to last until May 30 restricts almost all types of transportation including air, rail, public transport as well as movement of private vehicles with the exception of some critical travel services being offered during this period.
If the shutdown, which already extended by around half a dozen times, prolongs, domestic demand continues to remain weak and storage insufficiency persists the BPC will have to defer more cargoes in the coming months, he said.
For H1, 2020, the BPC is importing upto 1.06 million tonnes of diesel, jet fuel, furnace oil and octane combined under tendering system from Unipec Singapore Pte Ltd and Vitol Asia Pte Ltd.
The BPC is expecting to import upto 880,000 tonnes of 0.05 per cent sulfur gasoil (diesel), 110,000 tonnes of jet fuel, 40,000 tonnes of furnace oil and 30,000 tonnes of octane under the tendering system during H1 2020.
Unipec’s premium rate is $2.33 per barrel to Mean of Platts Arab Gulf (MOPAG) for gasoil assessment, $3.32 per barrel to MOPAG for A-1 jet fuel assessment.
Vitols’ premium rate is US$2.20 per barrel to MOPAG for gas oil assessment, $3.30 per barrel to MOPAG for A-1 jet fuel assessment, $24.98 per tonne furnace oil $5.43 per barrel mt to MOPAG for octane.
In addition, Kuwait Petroleum Corporation (KPC) will provide lion share of the refined petroleum products under term deal during H2, 2020, the company official said, without quantifying.
Apart from KPC, BPC is expected to import oil in the H2, 2020 from existing long term suppliers, which include Malaysia's Petco Trading Labuan Company, Emirates National Oil Company, PetroChina Singapore, Chinese Zhenhua Oil Company Ltd, Petrolimex Singapore of Vietnam, Philippine National Oil Corporation, Indonesia's Bumi Siak Pusako, and Oman Trading.
BPC is expected to import around 4.0 million mt of refined petroleum products in 2020, which include 0.005 per cent sulfur gasoil, jet fuel, furnace oil, superior kerosene, and octane.