PDB’s new demand overburden for BPC

For furnace oil

BPC has to import 1.80 lakh tons instead of 60,000 tons

Mahfuja Mukul: Bangladesh Power Development Board (PDB) is leaning towards furnace oil, an alternative fuel for power plants, to reduce gas supply. The Bangladesh Petroleum Corporation (BPC) is in trouble. The state-owned BPC,petroleum fuel supplier completed the six-month procurement process at the beginning of the year as per the demand of various companies. But the PDB is putting extra pressure on BPC due to the demand for additional furnace oil.
For the first six months of this year, BPC bought 60,000 tonnes of furnace oil, but later PDB alone demanded another 260,000 tonnes. According to BPC sources, there are currently 48 Furnace Oil-dependent power plants in the country, both in public and private. Of these, 26 are private IPPs (independent power plants) and 20 are government. These power plants have a monthly demand of 60,000 tons of furnace oil. Of this, the demand for furnace oil in government power plants is 15,000 tons per month.
Private IPPs have a monthly demand of 45,000 tons. However, the private power plants started importing furnace oil from 2014 with the import facility. BPC then stopped supplying furnace oil to IPPs.
Although the IPPs were given the opportunity to import furnace oil, the condition was that 10-12 percent of the furnace oil should be taken from BPC. But if the price of fuel in the international market was low, according to the terms of the
agreement, 10-20 percent of the demand for fuel would have been taken from BPC. Recently, when the price of fuel increased in the international market, IPPs started taking furnace oil from BPC using that condition.
Meanwhile, BPC has completed the process of importing 60,000 tonnes of furnace oil for the first six months of this year. The company also issues work orders to the supplier. After that some consignments of Furnace Oil were unloaded at the main depots of Padma, Meghna and Jamuna Oil of Patenga Guptakhal in Chittagong. Subsequently, on January 26, PDB submitted a demand letter to BPC for the supply of 260,000 metric tons of furnace oil.
The demand was met for five months from February to June this year, BPC said.
On the other hand, since the beginning of January, there has been instability in the international market over the price of fuel oil. The BPC was suddenly shocked by the collection of furnace oil. The state-owned fuel supplier is in trouble, especially as suppliers are unable to supply furnace oil immediately due to rising prices in the international market.
BPC officials said that despite the current high prices in the international market, the process of buying another one lakh tonnes of furnace oil has already started. These furnace oils will arrive in the country by next May-June.
A BPC official, speaking on condition of anonymity, told that the annual import of fuel started as planned six months ago. One lakh 60 thousand tons of fuel is imported annually for power plants.
Work orders are given in two parts of the year. The process of purchasing 60,000 tons of furnace oil from January to June this year was completed last year. Work order has also been given. These furnace oils are also being supplied to the power plants regularly through PDB.
“By the end of January, the PDB had demanded 260,000 tonnes of furnace oil, he said. If such a demand is suddenly given, we get into trouble. Because it takes time to import from abroad. There are also various international problems.
BPC Deputy General Manager (Commerce and Operations) said. Zahid Hossain told, “PDB has demanded 260,000 tonnes of furnace oil from February to June. We have already started importing additional one lakh tonnes. This one lakh ton of furnace oil will come to the country next May-June.
“Apart from the international market prices, the decision to import fuel has to be taken keeping in view the various circumstances,” he said. But when there is a sudden demand from PDB, it becomes difficult to manage.’
Speaking on the occasion, PDB Deputy Secretary (Production) Helalur Rahman told, “Furnace oil is regularly used in some of our power plants.” Demand is given according to their forecast. But some plants are gas dependent. If the supply of gas suddenly decreases in these plants, they have to resort to furnace oil as an alternative. Production can’t be stopped.’
He added that now there is a problem with LNG. That is why there is some gas crisis. The Petroleum Corporation has been asked to supply additional furnace oil for this purpose.