State-run Bangladesh Petroleum Corp will import just one 30,000-mt cargo of 180 CST fuel oil with 3.5% sulfur content, per month instead of the two-three cargoes it was importing earlier, amid surplus supply at its storage tanks, company chairman AM Badrudduja said Monday.
“We have requested our supplier to provide less fuel oil as we are now taking one 30,000-mt 180 CST high sulfur fuel oil cargo per month instead of two-three per month, to cope with the existing oversupply,” he said.
Badrudduja did not say how long BPC would continue buying lower volumes.
BPC had earlier targeted importing 1 million mt of HSFO in 2015, up 25% year on year.
It has been forced to import lower volumes as its main consumer — state-run Bangladesh Power Development Board or BPDB — has not been buying committed volumes of the fuel, the BPC chairman said last week.
Imports have already exceeded BPC’s storage capacity of around 100,000 mt, forcing it to halt the unloading of new cargoes, he said.
The state-owned oil importer and marketing company was also forced to pay demurrage for several imported cargoes at $15,000/day that were waiting to be offloaded at the Chittagong port, he said.
Cargoes are allowed to remain onboard a vessel for a maximum 108 hours. BPDB has been consuming just half the quantity of HSFO it had committed to receive, the BPC chairman said.
But BPDB blames the BPC for this situation.
BPDB is responsible for generation and distribution of electricity.
It generates electricity from its own plants and buys from private power plants to supply to end-users.
BPDB had committed to buying around 1.2 million mt of fuel oil from BPC in 2015, which was to have been supplied to some private-run power plants as well as to BPDB’s own power plants.
But BPDB chairman Md Shahinul Islam Khan said last week that as BPC had allowed some private power plants to import fuel oil directly from the international market, BPDB did not require as much fuel oil as it had committed to buy.
BPC had earlier projected the country would need to import around 1.6 million mt of 180 CST fuel oil with 3.5% sulfur in 2015, up 23% year on year, due to the rising number of fuel oil-based power plants, Platts has reported.
Of this, private power plants were expected to import around 600,000 mt.
Bangladesh’s fuel oil imports have been rising in recent years as the country reduced dependency on natural gas for power generation by setting up dozens of fuel oil-based power plants.
BPC has deals with different international suppliers for fuel oil imports, and has settled the import price for first-half 2015 at a premium of $29.50/mt to Mean of Platts Arab Gulf 180 CST HSFO assessments, down $4.50/mt from H2 2014, Platts has reported.
BPC began importing 180 CST HSFO around mid-2010, when fuel oil-fired plants started coming online.
Prior to that, it was a regular HSFO exporter, the BPC official said.
Bangladesh currently has 39 oil-fired power plants, of which 28 with an overall generation capacity of 2,133 MW, run on fuel oil and the rest on gasoil.
Source: Platts
