Govt to buy 16 lakh tonnes of fuel oil under G2G deals

The government has taken an initiative to purchase around 16 lakh metric tonnes of fuel oil from international companies under government-to-government (G2G) agreements.

The estimated value of the imported fuel, based on current international market prices, is around $1.65 billion, equivalent to nearly Tk20,000 crore.

A high-level delegation led by Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood Tuku will visit Singapore on Saturday to negotiate terms related to the import, including premium, shipping charges, insurance and other conditions.

Senior officials of the Energy Division and Bangladesh Petroleum Corporation (BPC) said the price of fuel purchased under G2G arrangements will be paid according to a predetermined formula. However, they said discussions on premium, freight charges, insurance and other costs will be held during the Singapore meeting.

Officials said the minister’s direct participation in such an important G2G fuel purchase negotiation will send a positive message and help strengthen Bangladesh’s position with international suppliers.

They said that while such negotiations are usually handled by secretary-level officials in the past, a minister-led delegation will enable Bangladesh to present its position more effectively to global suppliers.

“The high-level engagement will also help ensure energy security and facilitate fuel imports under more competitive and favourable terms,” they added.

The delegation is expected to include BPC Chairman Md Rezanur Rahman, a joint secretary of the Energy Division and officials from BPC’s commercial department, according to sources.

BPC has almost completed the tender process for importing refined fuel for the July-December period. The premium has been set at 13.18 cents to 14.78 cents per barrel. The premium was sought considering shipping risks during conflicts in the Middle East.

However, BPC officials said international oil prices have started declining as the conflict situation has eased recently, and the premium may also come down.

According to BPC sources, Bangladesh currently has an annual demand for around 72 lakh metric tonnes of fuel oil. About half of the requirement is imported through international open tenders, while the remaining quantity is purchased under G2G agreements. The country currently has such agreements with 10 international companies.