BPC faces fuel supply disruption as 11 cargoes fall through

Bangladesh faces potential disruption to its fuel supply after several international suppliers declared themselves unable to deliver 11 cargoes scheduled for November, raising concerns over possible supply shortages and irregularities in procurement by the state-run Bangladesh Petroleum Corporation (BPC).

The development has also raised questions about the role of a businessman allegedly close to the former Awami League government, whose companies have links with several of the suppliers and have secured substantial fuel import contracts.

Industry insiders have expressed concern over the timing of the supply failures, particularly as former prime minister Sheikh Hasina has announced plans to return to Bangladesh in December. They have called for an investigation into whether the disruption is part of a deliberate attempt to put the government of Prime Minister Tarique Rahman under pressure.

Fuel experts have also urged the authorities to recover compensation from suppliers that fail to honour their contractual commitments and consider blacklisting them.

Controversy has meanwhile emerged over BPC's decision to award additional fuel supply contracts to Vitol Asia, a company linked to businessman Dr Ezazur Rahman, allegedly at significantly higher premiums than those under existing long-term agreements.

Under the long-term contracts, the premium was $9.50 per barrel for diesel and $10.15 for jet fuel. Under the open tender method (OTM), however, the rates for Vitol Asia have been set at $16.68 and $17.88 per barrel respectively.

Under Package-02 alone, the company secured contracts to supply 230,000 tonnes of diesel and 40,000 tonnes of jet fuel. The higher premiums are expected to cost the country an additional $14.793 million, equivalent to around Tk182 crore at an exchange rate of Tk123 per dollar.

The report also alleges that the procurement process disregarded a decision of the Cabinet Committee on Government Purchase.

In September, BPC finalised a proposal to import 605,000 tonnes of diesel and 90,000 tonnes of jet fuel through OTM, with proposed premiums of $14.85 and $16.49 per barrel respectively. The committee did not approve the proposal, citing the high premiums.

However, even higher premiums were subsequently offered through a procurement process that allegedly lacked transparency, with Vitol Asia securing the Package-02 contract.

According to BPC sources, 11 government-to-government (G2G) cargoes scheduled for November will not be delivered as planned. The affected suppliers include Unipec Singapore, which was due to supply three diesel cargoes and one jet fuel cargo on 19, 21, 22 and 24 November; Indonesia's PT Bumi Siak Pusako (BSP), scheduled to deliver diesel on 28 November; PetroChina International Singapore, due to supply diesel on 10 November; and OQ Trading Limited of Oman, scheduled to deliver motor gasoline on 23 November.

The cargoes were expected to arrive in November to meet the country's fuel requirements in December.

Sources have expressed concern that seven of the affected cargoes have links to Ezazur Rahman. Six of the 11 international suppliers on BPC's approved list reportedly have local agents owned by him through Seven Mark and Transbangla Commodities Limited.

Questions have also been raised about the involvement of senior BPC officials, including its director of operations, and officials of the Ministry of Power, Energy and Mineral Resources in the procurement decisions. Allegations include that the OTM process was influenced by undisclosed arrangements to secure contracts at higher premiums.

Industry insiders argue that BPC could have selected suppliers offering lower prices from the list of interested companies through the direct procurement method (DPM), rather than awarding contracts at higher rates.

The allegations also extend to the concentration of fuel import contracts in companies associated with Ezazur Rahman.

BPC data show that it awarded contracts for the import of 5.51 million tonnes of refined petroleum products through G2G arrangements and open tenders in the 2025-26 fiscal year. Of the total, around 4.3 million tonnes went to companies with local representation or business links involving his firms, accounting for nearly 78% of the total volume.

Insiders have alleged that restrictive and unrealistic tender conditions have limited competition, making it difficult for new suppliers to enter the market.

During the June-August procurement period, BPC invited tenders for four packages covering between 925,000 and 1.15 million tonnes of refined petroleum products over three months.

Unipec Singapore secured Package PG-1 for 320,000-390,000 tonnes of diesel and 70,000-90,000 tonnes of jet fuel. Vitol Asia won PG-2 for 300,000-340,000 tonnes of diesel and 60,000-80,000 tonnes of jet fuel. Trafigura secured PG-3 for 150,000-200,000 tonnes of furnace oil, while Vitol Asia also won PG-4 for 25,000-50,000 tonnes of octane.

A previous reduction in fuel import premiums following a change in political leadership has also been cited as evidence of potential savings from more competitive procurement.

BPC saved $42 million in six months between July and December 2025 by reducing premiums on G2G fuel imports, according to former BPC chairman Md Amin Ul Ahsan.

He had said that, after taking office, he found premiums on G2G imports to be $2-$2.50 per barrel higher than those under open tenders. Following negotiations with suppliers, BPC secured lower premiums, resulting in the savings.

When contacted, BPC Chairman Dr Rafiqul Islam said he did not believe there was any conspiracy behind the latest supply disruption, but pledged to investigate the matter.

Asked why contracts were being awarded to companies associated with Ezazur Rahman, he said BPC could not go beyond its list of approved suppliers. However, the corporation had invited tenders to enlist additional companies and expected to bring several new suppliers on board.

Professor M Shamsul Alam, energy adviser to the Consumers Association of Bangladesh (CAB), said the fuel procurement process appeared to be influenced by a supplier syndicate.

"Suppliers quote prices according to their own preferences, and the relevant departments accept their calculations," he told Bangladesh Pratidin.

He said any financial losses resulting from suppliers' failure to deliver contracted cargoes should be recovered from the companies concerned, adding that blacklisting them should also be considered.

BPC currently has 11 international suppliers on its approved list, including Unipec, PT Bumi Siak Pusako, Petco Trading Labuan, PTT International Trading, OQ Trading, PetroChina International, Emirates National Oil Company (ENOC), Indian Oil Corporation (IOC), Numaligarh Refinery, Vitol Asia and Sinochem International Oil.

Repeated attempts to contact Dr Ezazur Rahman by telephone on Tuesday night to obtain his comments on the allegations were unsuccessful.

Source: Bangladesh Pratidin