BD set to import diesel from India at high price

Bangladesh is set to import fuel oil from Bharat Petroleum Corporation Ltd (BPCL) owned Numaligar Refinery Limited (NRL) at a premium rate of $5.50 a barrel. However, a committee has been formed to examine the issue.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid and Indian State Minister for Petroleum and Natural Gas Dharmendra Pradhan have agreed to work on the NRL proposed rate at New Delhi, according to the Energy Ministry.
A 19- member delegation lead by the State Minister for Power, Energy and Mineral resources Nasrul Hamid is now visiting New Delhi from October 2 to discuss premium issues of diesel import from Numaligar in India (through a proposed 130-kilometre- long Indo-Bangla Friendship Fuel Pipeline), import of liquefied Natural Gas and setting up of superthermal power plant at Rampal.
Earlier, NLR sought a premium of $5.50 a barrel for installation of 130-kilometre- long Indo-Bangla Friendship Fuel Pipeline for importing one million tonnes of diesel from India's Assam.
Meanwhile, Bangladesh Petroleum Corporation (BPC) suggested for setting up premium at $1.78 on import of each barrel of diesel if 100 percent investment comes from Bangladesh. It means that in the latest Indian proposal the rate is three times higher than the rate of premium proposed by the BPC.
"Bangladesh and India have agreed to set tariff of imported fuel and a joint working committee will work on it," a press statement of the Ministry of Power, Energy and Mineral Resources said.
As per negotiation between the two state ministers, Bangladesh would invest in installation of 130- kilometer pipeline to procure the fuel for next 20 years for fuel supply between Siliguri in Assam and Parbatipur of Bangladesh. The pipeline construction would require over Tk 614 crore with an interest of Tk 114 crore on funding the project.
India will install only 4-km of road from its own fund, the ministers agreed.
"BPC suggested the government for fixing $5.73 per barrel premium if Indian company NRL agrees on making 100 percent investment on pipeline of the much-talked-about project," a senior official told the Daily Observer.
Of the $5.73 premium, the BPC proposes maximum $2.70 as international premium rate and the rest $3.03 as the cost recovery for the pipeline for 20 years period.
The BPC allowed minimum premium for diesel import at $2.37 from Singapore and Middle East countries under an open bidding method as per its last bidding round.
According to the sources in the Energy Ministry and BPC, it holds series of meetings with an NRL delegation on April 18-19, 2016 in the presence of State Minister for Power and Energy Nasrul Hamid and Indian State Minister for Petroleum and Natural Gas Dharmendra Pradhan to settle the premium. But the parties failed to reach a consensus as the Indian company sought excessive premium for the fuel export.
In March 19, 2016, Bangladesh received a goodwill consignment of 2,281 tonnes of high speed diesel (gasoil) loaded in 42 rail wagons from India's NRL owned by Bharat Petroleum Corporation Ltd (BPCL). BPC spent $7.0 per barrel in the first import consignment, officials said.
State Minister for Power and Energy Nasrul Hamid and Indian State Minister for Petroleum and Natural Gas Dharmendra Pradhan were also discussed on gas import from Tripura and Myanmar, LNG supply from Indian Oil Company, joint venture re-gasification unit etc.
They discussed on installing pipeline for LNG supply from India to Rangpur here via Jessore. Indian Oil Company Limited (IOCL) has sought land at Moheskhali for setting up LPG plant.
About gas supply from Tripura, Indian state minister for Petroleum and Natural Gas Dharmendra Pradhan said they have insufficient reserve of gas. India will consider gas supply to Bangladesh in future. State minister Nasrul Hamid at a release said Indian minister welcomes Bangladesh interest for joining TAPI, Iran and Myanmar gas pipelines.