4:34 pm - Saturday October 18, 3225

Bangladesh switching to cleaner fuel

Bangladesh will lower the sulphur content of its gasoil imports from January next year, in line with a global move towards cleaner fuel, industry sources said today.

The country will import gasoil with 500 parts-per-million (ppm) sulphur instead of the 2,500 ppm, from January, 2015, said Bangladesh Petroleum Corp (BPC) chairman Eunusur Rahman.

oil_drops_MThe state-owned company, which is the country’s sole importer of gasoil, will start term negotiations to buy gasoil for next year, in November, he said.

The move towards cleaner gasoil is expected to increase Bangladesh’s import costs by about 50 US cents a barrel, Rahman added.

This translates to about US$11 million (RM35.9 million) to US$12 million for the 3-3.3 million tonnes of gasoil a year that the country imports to meet local demand.

Suppliers for Bangladesh’s middle distillates contracts are Kuwait Petroleum Corp (KPC), Malaysia’s Petronas, Emirates National Oil Co, Philippines National Oil Co, Vietnam’s Petrolimex, Indonesia’s Bumi Siak Pusako, PetroChina and Unipec.

With many refineries adding secondary units to process heavy gasoil into cleaner diesel, Bangladesh’s move will help to absorb excess low-sulphur oil products coming out of Middle East and Indian refineries, traders said.

“Not many refineries are producing high sulphur gasoil now, so it’s a natural progression,” a Singapore-based trader said.

Kenya, Tanzania, Uganda, Burundi and Rwanda are due to switch to the cleaner fuels from January 2015, while United Arab Emirates and Jordan switched to cleaner diesel earlier this year.