Nearly 40 percent of Bangladesh’s petroleum imports for the next six months will come from suppliers in China, officials said Wednesday, confirming a U.S. $1 billion deal by Dhaka to buy oil from several countries, including Indonesia, Malaysia and Thailand.
A cabinet committee on government purchases, headed by Finance Minister A.H.M. Mustafa Kamal, approved the proposal to buy 1.5 million metric tons of petroleum including diesel, gasoline and aviation fuel for the period covering January through June, officials said.
“Bangladesh is a fuel importing country. We import both refined diesel, jet fuel, gasoline and crude petroleum,” A.B.M. Azad, chairman of the Bangladesh Petroleum Corp. (BPC), told BenarNews, an RFA-affiliated online news service.
Included are deals with China’s UNIPEC ($266 million) and with PetroChina ($113 million). UNIPEC is to supply 400,000 metric tons of refined diesel, gasoline and jet fuel, while PetroChina is to supply 170,000 metric tons of the same refined fuels.
Md. Shamsul Arefin, an additional secretary at the cabinet division, confirmed to BenarNews that the committee had approved the proposals to import refined fuels from companies and suppliers in the People’s Republic of China and four other countries.
In the other countries, PTTT of Thailand, ENOC of the United Arab Emirates, BSP of Indonesia and PTLCL of Malaysia have been contracted to supply fuels to Bangladesh valued at $621 million, according to a copy of the proposal from the Bangladesh Petroleum Corp. obtained by BenarNews.
Azad said Bangladesh also buys crude oil from Saudi Arabia and the UAE to be processed at the Eastern Refinery in Chittagong.
“But this refinery cannot meet our annual demand,” Azad said, noting that the nation could refine about 1.3 million metric tons of crude oil – well below the annual demand of at least 6.2 metric tons.
“So we have to import refined fuel from different countries,” Azad said.
Bangladesh, he said, has government-to-government contracts with China, Indonesia, Malaysia, Thailand and the UAE to purchase refined fuels.
“In line with the contract, we floated an international tender and the Chinese companies were the lowest bidders,” Azad said. “The Chinese companies have been supplying us with fuel in line with the terms and conditions, but it does not mean that we will stop importing fuels from the Middle Eastern countries.”
Azad said Bangladesh had reached a similar deal with companies in China and the four other countries in 2020.
He expects demand to grow in the coming months.
“The economy has turned around from the fallout of COVID-19. So, the demand for fuels will certainly increase in the coming months,” Azad said.
Dr. Mustafizur Rahman, a distinguished fellow at the Center for Policy Dialogue, an economic think-tank, called on Dhaka to consider price concerns in dealing with Beijing.
“China is not an oil producing country. They import oil from different petroleum producing countries and sell it to other countries after refining,” he told BenarNews.
“I think Bangladesh should import fuels directly from the petroleum producing countries. If we buy from the producing countries, the price would be lower than China’s,” he said.
“I hope the government will consider the price issue,” he said.
Bangladesh is almost totally dependent on imports for fuels such as diesel, gasoline, aviation fuel, kerosene and other petroleum derivatives.
Reported by BenarNews, an RFA-affiliated online news service.