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20 June 2024

Business Insider Bangladesh

Bangladesh may prefer to import Russian oil via third country

UNB || BusinessInsider

Published: 13:06, 21 August 2022  
Bangladesh may prefer to import Russian oil via third country

Photo: Collected

Bangladesh may prefer to import Russian oil via a third country to avert possible risks of the business.

According to official sources at the Ministry of Power, Energy and Mineral Resources, neighboring India might be a preferred third country with regard to importing Russian oil.

"Currently, India has been importing Russian oil defying the US sanctions while Bangladesh has a long-term contract with India to import refined oil from its refinery at Numaligarh in Assam state, '' said an official at the ministry preferring anonymity.

“If there is a bilateral arrangement between the two nations, such a business is very much possible,” he said, adding it could be a possible way to avert the risk in import of Russian oil at a cheaper rate.

The possibility of importing petroleum fuel from Russia came into a discussion at the policymaking level following an offer from a Russian company to sell its refined petroleum, especially diesel, at a cheaper rate to Bangladesh.

Russneft, a Russian oil company headquartered in Moscow, recently offered the state-owned Bangladesh Petroleum Corporation (BPC) petroleum fuels at $59 per barrel against a global market price of over $100 per barrel.

As per the offer, the Russian company will reach its refined petroleum to Chattagram port at the rate which includes the premium and shipping cost as well.

However, the Ministry of Power, Energy and Mineral Resources has not yet officially disclosed anything about the Russian company’s offer.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid declined to give any detail of such an offer.

“No more update as yet,” he told UNB on Thursday.

Sources at the BPC said the import of Russian oil is not like fuel import from other countries.

They said Bangladesh is assessing its possible risks to import petroleum fuels from Russia as such imports may invite anger from the USA and its Western allies.

Russia has been facing huge economic sanctions from the USA and its European allies following its war with Ukraine.

If any country directly imports Russian oil it may face similar sanctions, said the officials, adding that is why any move in this regard will not only depend on the decision of the Ministry of Power, Energy and Mineral Resources.

According to official sources, after receiving the offer from Russia on petroleum fuel sale, now different concerned ministries including the Ministry of Foreign Affairs, Ministry of Finance, and the Ministry of Power, Energy and Mineral Resources are assessing the potential risks and different processes of such import.

Prime Minister Sheikh Hasina at the ECNEC meeting on August 16 said that the government wants to buy fuel oil, fertilizer, and wheat from Russia.

In this connection, she mentioned she had given the responsibility to her Principal Secretary to talk to the Russian Ambassador regarding the matter.

“The Foreign Ministry can take initiative in this matter, we will procure fuel oil from them (Russia) with our own funds as the SWIFT is closed and the price of the dollar is very high,” she said.

Meanwhile, Power Cell director Mohammad Hossain said that if the government can manage the import of diesel at a cheaper rate, the operation of the diesel-run power plants will be resumed to increase the power generation.

As part of an austerity measure, the government suspended the operation of the diesel-fired power plants from July 19 and introduced area-wise load shedding to reduce diesel imports and save foreign currency.

Although area-based load-shedding was scheduled for one hour, it continued for three hours at a time in some city areas across the country. Load-shedding in rural and remote areas, however, stretched for more hours, consumers claim.

Markets and shopping malls can now stay open until 8:00 pm. The government also prohibited illumination in different social gatherings in community centers, shopping malls, shops, offices, and houses since July 7.

Finally, it introduced a holiday staggering for industries on August 11 as part of the plan to save power and natural gas.