Bangladesh Petroleum Corporation (BPC) will import 54.60 lakh tonnes of fuel oil next year from the international market to meet the country’s needs amid the ongoing Russia-Ukraine war and geopolitical tension.
A proposal for next year’s fuel imports, comprising 16 lakh tonnes of crude oil and 38.6 lakh tonnes of refined oil, was placed at a meeting of the Cabinet Committee on Economic Affairs on Wednesday.
Of the volume, the state-run BPC, the sole petroleum importer and distributor, will buy 38.6 lakh tonnes of refined oil directly under the state-to-state arrangement.
The rest 16 lakh tonnes will be imported in crude form from Saudi Aramco and The Abu Dhabi National Oil Company, Abu Dhabi, according to a decision of the committee.
The BPC’s plan to import crude oil from Saudi Aramco and Abu Dhabi National Oil Company through the direct purchase method has been recommended for provisional approval.
The war in Ukraine has triggered a surge in oil prices in the global market, fuelling fears of an economic downturn. Crude oil prices have been hovering around $100 per barrel for the last few months, which ranged between $60 and $70 a barrel prior to the war.
In light of the turmoil in the international market, the government decided to hike fuel oil prices by as much as 51 percent, which in turn pushed up prices of goods and services across the board.
During the January-June period of this year, the BPC imported 7.91 lakh tonnes of crude oil and 27.9 lakh tonnes of refined oil mainly diesel and oil namely jet fuel, octane, and furnace oil.
Bangladesh’s transport sector is the main user of petroleum accounting for 63 per cent of the total annual consumption of oil followed by irrigation, electricity generation, and the industrial sector, according to BPC data.
Bangladesh used roughly 65 lakh tonnes of petroleum annually and imported fuel accounts for 90 per cent the total requirement.