Bangladesh is trying to find alternative ways to bring Russian fuel oil in the country. Besides, Bangladesh Petroleum Corporation (BPC) is studying various aspects including oil quality, freight cost, payment method, currency, load point etc.
Meanwhile, about 50 litres of sample Russian fuel oil arrived at the Shahjalal International Airport in Dhaka on Wednesday. The sample has been sent by the Rosneft Oil Company, a Russian integrated energy company.
The fuel, however, has not yet been released by the customs. After release, it will be taken to the state-owned oil refinery Eastern Refinery Limited (ERL) in Chattogram for tests, BPC officials said.
When contacted Mohammad Lokman, Managing Director of the ERL on Friday told Bangladesh Post, "We are yet to receive the sample product. After receiving the sample, it will take a week for test and get the report.”
Experts say that Bangladesh, like other countries including India, can buy cheap fuel oil from Russia. There are many ways, but the problem is the United States.
Experts fear that if the United States and the European Union are unhappy, Bangladesh's exports of $35 billion to these two major markets may be threatened. Especially if they do not import clothes from Bangladesh or reduce the import, the country will face a big crisis.
There are also complications with payment of price for buying Russian products. Due to ban on SWIFT, payment in US dollar is not possible through banking channel. And Russia is also stipulating payment in rubles for many countries.
Talking to experts they said, "The price can be paid in three ways. First, we now export worth about $1 billion of goods to Russia. The price of oil we buy can be adjusted by the income we get from exports. Secondly, we have to make big purchases for under constructed Rooppur nuclear power plant; the bill of oil import can be reconciled with that purchase bill. The last one is that if the United States and Russia agree, the payment can also be made in dollars.
Russia made an official offer to sell fuel oil to Bangladesh for the first time last May. Bangladesh did not respond to Russia's proposal at that time. But recently, Russia has again offered Bangladesh to sell refined oil.
According to related sources, officials of the Energy Division and Bangladesh Petroleum Corporation (BPC) are reviewing several issues regarding the import of Russian oil. The government has already made a committee to find a way in this regard.
Due to the ongoing war between Russia and Ukraine, the price of fuel oil has increased in the global market.
However, the price of Russian oil dropped following the US-led western countries' sanctions on Russia. In the circumstances, various countries, including India and China, are buying oil from Russia at a low price.
Russia also offered to sell its crude oil in March and refined oil last May to Bangldesh.
BPC sources said for crude , companies offered oil that contains 5,000 parts per million (ppm) of sulphur which is too heavy for the Eastern Refinery Limited, the lone oil refinery of the country.
For refined fuel, however, the companies proposed a similar sulphur content that Bangladesh now uses.
At present, Bangladesh imports 50ppm mixed refined fuel against the benchmark 350ppm of the Bangladesh Standards & Testing Institution.
In order to import cheaper oil from Russia, on August 16 Prime Minister Sheikh Hasina directed the relevant ministries and departments to find a way to import fuel oil from Russia. Following her directives, the BPC formed a committee to scrutinise the scope to import Russian oil.
A high-level meeting at the secretariat on Thursday decided that it is not possible to import oil from Russia by alternative currencies against the dollar. Because, it is impossible for Bangladesh to provide large amount of Russian currency Ruble. Apart from that, due to the embargo, oil cannot be imported from Russia even in dollars.
It also directed the Energy and Mineral Resources Division to check to import of oil from another country at a lower price.
At the end of the meeting, Prime Minister's adviser on private industry and investment affairs, Salman F. Rahman told reporters, 'There is a ban on fuel oil from Russia. We cannot import oil under the ban. So, oil has to be imported from any other country where the price is low.”
However, Commerce Minister Tipu Munshi told reporters that the government is thinking of importing oil from the two countries by paying money through banks that can deal with Russia and Ukraine.
In the meeting, it was decided to find which oil can be bought from other countries at a lower price. The example of India in particular was discussed in the meeting. India is importing oil from Russia. Can Bangladesh go in that process or not? Or whether oil can be brought by requesting India as a third party, is also discussed.
Policy Research Institute (PRI) executive director Ahsan H. Monsur said that the best way for Bangladesh now would be to import oil from a third party. It could be India, China and Turkey. The government can import oil from any one of these three countries.
He said, "Paying the bill of oil import from Russia is not a problem, the problem is whether we will import oil from Russia or not?" It is a matter of political decision. If buying oil from Russia is going to upset the US and the EU, then it will not be wise decision.
Eastern Refinery Limited currently refines crude imported from Saudi Arabia and the United Arab Emirates and produces various types of fuel including diesel, petrol, and octane. They have the capacity to refine 1.5 million tonnes of oil per year.