BPC eyes new crude markets
Growing security risks around the Bab el-Mandeb Strait are exposing Bangladesh’s fuel supply chain to longer routes and sharply higher transport costs, prompting the government to seek alternative sources of crude oil to reduce its dependence on Middle Eastern supplies.
Bangladesh Petroleum Corporation (BPC) has already begun discussions with potential alternative suppliers and expects to secure crude from a new source soon, BPC Chairman Md Rafiqul Islam said on Tuesday.
“We have already spoken to representatives of an alternative source about importing crude oil.
We are hopeful that we will be able to import crude from an alternative market very soon,” he told reporters at an exchange-of-views meeting at the BPC headquarters in Chattogram.
He said BPC began examining alternative sources after the Middle East crisis escalated in March.
Eastern Refinery, the country’s sole state-owned refinery, subsequently tested crude grades from several countries to determine whether they could be processed using its existing facilities.
The tests identified crude from Nigeria, Malaysia, Norway and Algeria as compatible with the refinery’s current refining system.
The refinery tested Nigeria’s Bonny crude, Malaysia’s Malaysian Blend, Norway’s Alvheim Blend and Algerian crude before submitting its findings to BPC in early April.
Eastern Refinery has an annual crude-processing capacity of around 1.4-1.5 million tonnes.
At present, it mainly processes Arabian Light crude from Saudi Arabia and Murban crude from the United Arab Emirates.
These two grades are used to produce 13 types of petroleum products, including diesel, bitumen and petrol.
The search for alternative suppliers has gained urgency as security concerns around the Bab el-Mandeb Strait have disrupted the traditional shipping route for Bangladesh-bound fuel vessels.
Ships avoiding the route have had to undertake substantially longer journeys, increasing both transit times and costs.
The impact was highlighted by the recent arrival of Bangladesh Shipping Corporation’s crude oil tanker MT Ninemia at Chattogram port on Saturday.
Carrying nearly 100,000 tonnes of crude, the vessel travelled through the Suez Canal, Mediterranean Sea and Strait of Gibraltar before sailing around the Cape of Good Hope.
The journey took around 50 days and incurred an additional cost of Tk 66.63 crore.
A local official of the tanker said the vessel could have reached Chattogram from Yanbu in around 13-15 days had it travelled through the Bab el-Mandeb Strait and the Indian Ocean.
Against this backdrop, diversifying crude sources could help Bangladesh reduce its exposure to disruptions along a strategically important maritime route and provide greater flexibility in securing refinery feedstock.
BPC Chairman Rafiqul Islam, meanwhile, sought to reassure consumers that the country would not face a fuel shortage in the immediate future.
“There will be no fuel shortage until December,” he said, citing sufficient stocks and confirmed import orders.
He added that the government had both short- and long-term plans to meet the country’s fuel demand.
Meanwhile, BPC has almost finalised an import deal for liquefied petroleum gas (LPG) following several rounds of tendering.
The consignment is expected to arrive by the end of this month, Rafiqul Islam said.
The latest crude-sourcing initiative reflects the growing importance of supply diversification for Bangladesh’s energy security as geopolitical tensions affect established trade routes.
While the country continues to rely on Saudi and UAE crude for its existing refinery operations, the successful testing of alternative grades provides scope for widening its supplier base if commercial and logistical arrangements can be finalised.
