Forex crunch: Two foreign companies reluctant to supply fuel to BPC

Staff Reporter :
Due to leftover amid liquidity stress, two major fuel supplier companies have expressed reluctance to supply fuel oil to Bangladesh Petroleum Corporation (BPC). It is reported that Singapore-based Vitol Asia and China’s oil trading giant Unipec’s claimed outstanding bills to the BPC is about USD282 million.
Concerned parties have warned that any disruption in the supply of fuel could have catastrophic consequences, including power outages, transport sector crises, and complications in farmers’ irrigation.
BPC officials have indicated that six companies are currently supplying fuel oil to BPC, with Singapore-based Vitol Asia and Chinese firm Unipec being the two lowest bidders. Both companies won a tender to supply 1.6 million metric tons of fuel oil in the first half of the year, resulting in BPC libility USD 152.60 million to Vitol Asia and USD 129 million to Unipec.
As a consequence, BPC wrote to the ministry of power, energy and mineral resources expressing concern that if they are unable to clear the dues, the companies may stop supplying fuel.
If the fuel cargoes do not arrive as per schedule, the fuel reserves would decline alarmingly.
“There will be uncertainty over supplying uninterrupted fuel. As a result, it would impact the agriculture sector in the ongoing irrigation season,” the letter added.
Earlier, Vitol Asia sent emails on August 8 and 10 last year informing that they will not be able to supply fuel to Bangladesh if BPC does not clear the dues and demanded interest on the late payments.
Then on February 28, officials of Vitol Asia met with BPC.On the same date, the Beijing-based oil giant Unipec wrote to the BPC about its dues.
Regarding this leftover of BPC, ABM Azad, Chairman of the state-owned Petroleum Corporation Said that, “It’s true that there is a dollar crisis in the banks. So, we are behind in the LC openings. But it’s not true that we are not able to open LCs. We are opening those but we are moving slowly”.
Along with Vitol Asia and Unipec, BPC had selected the Emirates National Oil Company, BSP Zapin of Indonesia, PetroChina International and Indian Oil Corporation to import 4.50 lakh metric tonnes of fuel under different terms contracts.