4:53 pm - Thursday May 24, 5792

BPC concludes fuel term deals at unchanged premiums

State-owned Bangladesh Petroleum Corporation (BPC) has concluded second-half 2014 term negotiations with eight companies for oil products at mostly unchanged current premiums, a senior BPC official said on Sunday.

Premiums will be unchanged for all oil products other than fuel oil, said the official with the direct knowledge of the matter.

BPCBPC finalised its gasoil contract for the second half of 2014 at a premium of $4.80 per barrel over Middle East quotes, while the term contract for jet fuel was fixed at a premium of $5.80 per barrel, unchanged from January-June deals.

The premium for fuel oil for the second half of 2014 will be $34 a tonne to Singapore spot quotes, down from $35 a tonne for current term cargoes and from $39.50 a tonne a year ago.

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

Apart from oil products, BPC is also importing 1.3 million tonnes of oil in 2014 for its sole refinery, up more than 8 percent from a year ago.

Bangladesh’s demand for fuel is growing sharply as a shortfall of natural gas has forced it to turn to oil-fired power plants to resolve electricity shortages.

The government heavily subsidises BPC, which sells fuel oil to the local market at much lower rates than import prices. BPC takes loans from the Islamic Development Bank and foreign banks to meet growing oil import bills.

Courtesy: Reuters