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Bangladesh - September 12, 2022

Bangladesh finding out alternative fuel sources

Mahfuja Mukul: The Russia-Ukraine war has multifaceted effects around the world. Fuel oil and food grains suffer the most. Russia’s oil sector has been under EU-US sanctions since the start of the war. The global chain of oil import-export has collapsed. Which has an impact in Bangladesh as well. In one blow, the price of fuel oil has been increased by more than 40 percent. All kinds of commodity prices have increased. Bangladesh is looking for alternatives to deal with the situation.
Russia has offered to buy oil at a low price to Bangladesh despite various sanctions. Russian oil production and marketing company Rosnet sent an offer to sell oil to Bangladesh in the middle of last August. About 50 liters of refined fuel oil samples from Russia arrived at Dhaka’s Hazrat Shahjalal International Airport on August 24.
But in the current global political context, this proposal of Russia has made Bangladesh think. In this situation, experiments are going on whether oil will be bought from Russia or whether it will be suitable for Bangladesh. However, even if it buys oil from Russia, several challenges will remain for Bangladesh.
However, experts say, without looking at Russia, there are many other countries in the world, from whom Bangladesh can easily get good quality oil.
Energy expert Military Institute of Science and Technology (MIST) associate professor Dr. Amirul Islam told, we can bring fuel oil from Nigeria, we can also bring it from Malaysia, Indonesia and Algeria. I think there are only diplomatic issues with Russia. But there will be no diplomatic trouble to bring from Nigeria, Indonesia, Algeria and Malaysia. There is no ban on them.
He said, although these countries are small producers, their oil quality is good. We have agreements with every country. Even if we bring two lakh tons of oil from these countries, there will be no problem. Even if brought from Malaysia and Indonesia, the shipping cost will be lower.
He said that the country’s only fuel oil refinery, Eastern Refinery, needs to be updated, regardless of the countries from which oil is brought in the future, he said, “Our current refinery is quite old.” How long can this refinery run only for Middle East Arabian crude oil (crude)? At the moment of crisis, we have to get into trouble.
So the Eastern Refinery-II, which is being planned for construction, has to be built as a universal refinery and that is the time, where at least 10 types of crude oil can be refined. Then we can bring oil from different countries and refine it there. Then there will be no problem with oil. As the refinery is very old, it is not even possible to refine the oil completely properly in the Eastern Refinery.
Dr. Amirul Islam said, there are 160 types of crude oil in the world. Among the top 10 producing countries are USA, Russia, Saudi Arabia, Canada, Iraq, China, UAE, Kuwait. Besides, there are about 30 small countries that extract crude oil. Diesel is required more in Bangladesh. It is best to source lead crude, which has an American Petroleum Institute Gravity (API Gravity) above 35, to make diesel. Keeping the sulfur content at 0.5 percent will be enough for us to protect the environment.
He said that the people of the country are now paying a very good price for oil. It is not getting good oil accordingly. In many cases the oil is also adulterated. In this case, good refinery with advanced technology is essential. Bringing minimum 10 types of crude oil so that we can refine it. Instead of depending on only one or two countries, we need to increase our oil import area so that we do not fall into crisis.
But if we want to bring oil from these countries, we have to look at their economic situation with Bangladesh. Perhaps the only complication is with Russia. It is possible to import more easily from these countries’ he added.

Center for Policy Dialogue (CPD) special fellow economist Dr. Debapriya Bhattacharya told that it is a matter of seeing whether the oil exported by these countries has the capacity to be refined or refined in Bangladesh. How we will get oil from them is also to be seen. Because in many cases, there is no direct oil delivery system.
For this, the transport arrangement has to be arranged through a third party. Then see if there is any problem in sending money to these countries. It should also be seen whether Bangladesh has any experience in dealing with different currencies. Apart from this, the price of oil in the international market has decreased slightly. That also needs to be considered.
He said, unlike Russia, there are no restrictions in these countries. In that case there will be no problem. We have to see if we have any buying experience in international markets where these countries sell oil. If the government tries, of course it can.
Meanwhile, discussions are going on at the highest level of the government regarding the purchase of oil from Russia. Since India is buying fuel oil from Russia, it is being said from different quarters of the government that Bangladesh can also buy it. Earlier, Prime Minister Sheikh Hasina said, if India can buy oil from Russia, why can’t we, we can also bring oil from Russia. He said, low-income people are suffering due to inflation. Fuel oil is responsible for inflation.

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