Dhaka: The state has saved 42 million dollars by reducing the premium cost of fuel oil brought on a G2G (government-government) basis.
Bangladesh Petroleum Corporation (BPC) had been paying premiums at an increased rate for a long time. It will have to pay about 42 million dollars less in bills against imported fuel oil during the July-December period alone. The state-owned company hopes to reduce it further later.
Md. Amin ul Ahsan joined BPC as chairman a few months ago. He told Barta24.com, after joining, I saw that the premium cost of oil brought on a G2G basis was two to two and a half dollars higher than that of oil brought through tenders. We then met with them and said, even if it is 1 paisa lower than that of the open tender, the price has been given as a condition. I told them that there are several issues in the open tender, there is no G2G, so it has to be lower.
References were made to the tender we had recently given at the meeting. At that time, they agreed to reduce the premium cost by accepting our demands. It will be possible to reduce it further in the future. The BPC Chairman said that more competitive rates are being moved in the future.
He said, they had raised objections to reducing the premium cost, their statement was that we do not receive bills on time, which is causing losses. We have taken their points into consideration, now there are no more arrears. At one time, there were arrears of about 200 million.
In addition to saving money, BPC's important projects have returned to speed. It is known that the Dhaka-Chattogram oil pipeline is going to be inaugurated in January. Although the preliminary survey was completed in 2017, the project did not go ahead at the scheduled speed due to various reasons. Under this project financed by BPC, a 237-kilometer Dhaka-Chattogram pipeline, 59 kilometers from Cumilla to Chandpur, and 8.5 kilometers from Fatullah to Godnail depot will be laid. If the pipeline is commissioned, transportation costs will be saved by at least Tk. 65 crore per year. BPC hopes that transportation losses will also stop. Yet, it was neglected during the previous chairmen's time.
Bangladesh set a record for fuel oil consumption in the 2022-23 fiscal year. That year, 73,46,095 metric tons of fuel oil were used. That year, 49,35,483 metric tons of diesel were used. In terms of demand, furnace oil was next after diesel at 8,80,000 tons. However, in the next fiscal year 2023-24, the demand for fuel oil decreased to 6,361,320 tons. 50 percent of the country's total demand is being supplied by importing refined fuel oil from various sources on the basis of G2G term contracts and the remaining 50 percent is being supplied by importing refined fuel oil from various sources on the basis of international tenders.
Of the annual demand for fuel oil in the country, Eastern Refinery supplies only 1,545,245 metric tons. To meet the remaining demand, refined fuel oil is imported at a relatively high price. If crude oil is refined instead of refined oil, diesel costs can be saved by at least 5 to 6 taka per liter. That is why the ERL-2 project was taken up in 2008. A decade has passed before the work can begin due to various reasons including bureaucratic complications. Although the budget was initially set at Tk. 13 thousand crore, the expenditure has been increased more than 10 times. The latest revised DPP has set a cost of Tk. 23 thousand 736 crore. The production target of the second unit has been set at 30 lakh metric tons.
The BPC Chairman said that strong steps have been taken to implement the ERL-2 project. Hopefully, its progress will be visible very soon.
In addition to cost savings, many bold steps have been taken in internal affairs. There were also many officials who had been in the same department for 20 years. Despite various allegations of irregularities and corruption, no action was taken against them. It is said that they have been able to intimidate the corrupt and influential by transferring them.