Indian Oil Corporation, or IOC, is set to be a major supplier of refined petroleum products to Bangladesh as it has emerged as the most suitable bidder to supply half a million tonnes of fuel.

The Indian state firm is expected to supply cleaner diesel of 430,000 tonnes, jet fuel of 50,000 tonnes and octane 30,000 tonnes, a senior official of the Bangladesh Petroleum Corporation or BPC, told the FE on Monday.

This is the BPC’s first tender to import cleaner diesel having 50 ppm, or parts per million, sulfur, he said.

Currently, the BPC has been importing 500 ppm sulfur diesel. Specimens of other petroleum products, however, remain the same.

The BPC had floated the tender on May 7, with a deadline for submitting bids by May 17.

The BPC intends to import up to 1.040 million tonnes of 0.005 per cent sulfur gasoil, or diesel, jet fuel, furnace oil and octane combined through tender during July-December 2020, which is 22.67 per cent lower than H2, 2019.

The IOC offered the most favourable bid to supply almost half the total petroleum products to the BPC.

Seven global firms submitted bids by Sunday deadline to supply the BPC up to 870,000 tonnes of diesel, 120,000 tonnes of jet fuel, 20,000 tonnes of furnace oil, and 30,000 tonnes of octane.

Apart from the IOC, other firms that submitted bids are – PetroChina, Unipec, PTTP, ENOC, Vitol Asia and Puma.

The BPC will evaluate their bids soon and place the proposals to the board and subsequently send to the cabinet committee on public purchase for final approval, said the official.

It will import less petroleum products as the ongoing nationwide shutdowns to combat the coronavirus pandemic has dented domestic demand amid insufficient storage facility.

The BPC has already deferred nine oil cargoes of April and May, BPC director for operations Syed Mehdi Hasan said.

The shutdowns, which will continue until May 30, restrict the movement of all modes transportation, including air, rail, public transport as well as private vehicles, except for emergency service providers.

If the shutdowns, which have already extended by six times, prolong, the domestic demand will continue to wane and storage capacity will go down, eventually forcing the BPC to defer more cargoes in the coming months, he said.

For H1 of the year, the BPC is importing up to 1.06 million tonnes of diesel, jet fuel, furnace oil and octane combined under tendering system from Unipec Singapore Pte Ltd and Vitol Asia Pte Ltd.

The BPC is expecting to import up to 880,000 tonnes of 0.05 per cent sulfur gasoil (diesel), 110,000 tonnes of jet fuel, 40,000 tonnes of furnace oil and 30,000 tonnes of octane under the tendering system during H1 2020.

Unipec’s premium rate is US$2.33 per barrel to Mean of Platts Arab Gulf for gasoil assessment, $3.32 per barrel to MOPAG for A-1 jet fuel assessment.

Vitols’ premium rate is US$2.20 per barrel to MOPAG, for gas oil assessment, $3.30 per barrel to MOPAG for A-1 jet fuel assessment, $24.98 per tonne furnace oil $5.43 per barrel mt to MOPAG for octane.

In addition, Kuwait Petroleum Corporation, or KPC, will provide the lion’s share of the refined petroleum products under term deal during the H2, the company official said without quantifying.

Apart from KPC, BPC is expected to import oil in the H2, from the existing long term suppliers, including Malaysia’s Petco Trading Labuan Company, and Emirates National Oil Company, PetroChina Singapore.

The BPC is expected to import around 4.0 million tonnes of refined petroleum products in 2020, which include 0.005 per cent sulfur gasoil, jet fuel, furnace oil, superior kerosene, and octane.

Azizjst@yahoo.com