The closure of the Strait of Hormuz has created fresh uncertainty in the global energy market, which has also caused concern in Bangladesh. Although the country currently has about 34 days’ fuel-oil reserves, the government fears that if the prices of oil and LNG rise, its import costs and subsidy pressure will increase further.
After the war began last February, the government incurred a loss of about Tk 31,000 crore solely by importing fuel oil and LNG at high prices and selling them at low prices. Of this, Bangladesh Petroleum Corporation (BPC) lost Tk 21,000 crore on oil imports alone from March to June, with the rest of the loss coming on LNG imports. If the Strait of Hormuz remains closed again, Bangladesh will once more face a big risk.
Officials concerned said the process of buying 1.6 million tonnes of fuel oil through a government-to-government (G2G) arrangement until next December was almost finalized, and an understanding with the supplier companies had been completed. Under that understanding, four or five companies had agreed to supply oil at a premium (shipping charge) Tk 700 crore lower than in an open tender. On the other hand, no company has been supplying LNG under long-term contracts since last March, and Petrobangla has been buying LNG from the spot market; it will have to keep buying from the spot market in future too.
Petrobangla director (finance) AKM Mizanur Rahman told Jugantor on Sunday that if the Strait of Hormuz remained closed, the prices of oil and LNG would rise, which was a worry for Bangladesh. Last month, he said, the ceasefire had brought LNG prices down considerably, and it remained to be seen what LNG prices in the world market would be now. In March, Bangladesh had to buy LNG on the spot market at $28 per unit; because of the ceasefire, it bought that LNG at $16 to $17 last week. After the closure of the Strait of Hormuz, international oil trading was due to begin on Monday, and the price at which oil sold remained to be seen. Last Friday, Brent crude last sold at $76.10 a barrel; during the war in March and April, its price had risen above $114.
For the purchase of 1.6 million tonnes of refined diesel, octane, furnace oil and jet fuel under the G2G arrangement, an understanding meeting was held with 10 supplier companies in Singapore on June 20, which Energy Minister Iqbal Hasan Mahmud attended. As per the meeting’s rules, bargaining with the 10 companies was only over shipping and other costs, that is, the premium. At that meeting, India’s IOCL was the first to agree to supply diesel at a premium below $10, at $9.5. Several companies including Unipec and PetroChina then gave assurances of supplying oil at that rate. From June to August, the government has been buying fuel oil from four companies through open tender, where the premium paid was more than $13.5.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report