Oil import to rise by one-third

Dhaka,  Sat,  23 September 2017
Published : 24 Aug 2017, 01:12:45 | Updated : 24 Aug 2017, 11:02:24

Oil import to rise by one-third

Govt to award new 2,555MW plants in two years
M Azizur Rahman
The country's oil import volume as well as payment in this regard is set to surge by one-third from the existing level, said officials.

It will happen, as the government has approved awarding of some new diesel and furnace oil-fired power plants with the total capacity of 2,555 megawatts (MW) over the next two years, they added.

A senior official of Bangladesh Petroleum Corporation (BPC) said the oil import is expected to increase from March 2018, as some 1,768-MW diesel and furnace oil-fired power plants are expected to come online by then.

He assumed that some 650,000 tonnes of diesel and 750,000 tonnes of furnace oil will be required to import for operating the new power plants, of which 800-MW would be of diesel-fired and 968-MW would be of furnace oil-fired.

On August 09, the Cabinet Committee on Public Purchase (CCPP) approved awarding these power plant projects to their respective sponsors, selected through unsolicited offers under Speedy Supply of Power and Energy (Special Provision) Act 2010. The law has a provision of providing immunity to people involved with the quick-fix remedies for power generation.

The government has decided to build these power plants 'abruptly' to ramp up the country's overall electricity generation before the next summer ahead of the general election, said a senior official of Power Division under Ministry of Power, Energy and Mineral Resources. The election is slated to be held between October 2018 and January 2019.

Separately, on April 05, CCPP also approved awarding seven new furnace oil-fired power plants to generate around 787 MW of electricity.

The power plants were awarded through competitive tendering process, which will come online by October 2019, the official further said.

Some 600,000 tonnes of furnace oil will be required to import annually for operating the power plants.

Most of the sponsors of the new power plants might be entitled to import furnace oil directly to run their power plants, the official added.

BPC imported petroleum products worth over Tk 270.23 billion in fiscal year (FY) 2014-15, which was Tk 365.87 billion in FY 2013-14.

The country currently imports around 3.50 million tonnes of diesel and 1.50 million tonnes of furnace oil per year to meet the domestic demands of various sectors, including power plants, irrigation, transportation and industries.

The country also imports around 5.90 million tonnes of crude oil and refined oil combined annually.

The government has already waived oil import duties for private companies and also offered 9.0 per cent service charge on the import.

The country began expanding its oil-based power generation capacity in 2010, amid a natural gas deficit caused by depleting upstream reserves and rapid industrialisation.

It brought almost 40 new oil-fired power plants online by the end of 2016, and subsequently, Bangladesh became a furnace oil importer in mid-2010.

Prior to that, it was a regular fuel oil exporter, with cargoes coming from the state-owned BPC's subsidiary Eastern Refinery Ltd.

Since 2012, Power Division has awarded many contracts to build gas-fired and coal-fired plants, but these projects have faced delay, forcing the government to extend the contracts of the oil-fired plants.

Currently, Bangladesh has over 50 operational oil-fired power plants, being run with diesel and furnace oil.

Editor : A.H.M Moazzem Hossain
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