Energy Div-IOCL talks kick off for oil imports from India

The Energy Division has begun talks with India's state owned Indian Oil Corporation Limited (IOCL), to sign a long-term agreement to import fuel oil amid current energy crunch.
"We have already started discussions on importing diesel from IOCL, we can proceed with greater cooperation on energy issues, however, last week we sat with an IOCL delegation (Monday and Tuesday) in Dhaka. We would  submit our report to the Energy Division this week," a senior official of the Bangladesh Petroleum Corporation (BPC) told the Daily Observer on Saturday.
The IOCL will offer a formal proposal to BPC this week, the official added.
According to the energy and mineral resources division, the country now imports crude oil from Saudi Arabia and the United Arab Emirates (UAE) and refined oil from Singapore, Malaysia, Indonesia, the UAE, Kuwait, Thailand and India.
But the Russia-Ukraine war triggered an instability in the fuel market, which led Bangladesh to look for alternative import sources.
Oil imports from India is not new, earlier, Bangladesh imported oil from IOCL from 2003 to 2005, but the Indian company failed to continue supplies to meet their
domestic demand.
The official said, during the recent visit of Prime Minister Sheikh Hasin to India, the issue was also discussed in the meeting, India assured Bangladesh of providing diesel on an emergency basis.
From 2017, BPC has been importing refined fuel oil from India's Numaligarh Refinery Limited (based in Assam) using oil tanker trains. The annual import volume varies  between 80,000 to 85,000 tonnes.
"An oil pipeline is being laid to connect Numaligarh with  Parbotipur ( Dinajpur), we can proceed for greater cooperation on fuel imports, however, everything will depend on the discussions," the State Minister for Foreign Affairs Md Shahriar Alam earlier said.
According to the BPC, the construction work of the pipeline is scheduled to be completed by December 2022.
The BPC is looking into IOCL's capability as uninterrupted supplies are the most crucial issue, said the official.
Replying to a question, the BPC official said, "The issue of fuel oil imports from Russia is still at the initial stage. Issues relating to oil quality, utility, price and import cost is under scrutiny by BPC."
BPC officials said India can be a better source for oil imports, as the price of fuel oil is almost the same across the world, but the shipping and other costs make the difference.
The demand of fuel of Bangladesh is 4.6 million tonnes per year, of which 75 per cent is diesel, and the government meets 80 per cent of the demand through direct imports.
To ensure the supply of fuel, the Energy division is also looking into the possibility of importing diesel from Brunei.
The ministry of foreign affairs has already begun  discussions with Brunei and expressed its interest to sign a memorandum of understanding  (MoU) in this regard.
Foreign secretary Masud Bin Momen paid a two-day visit to Brunei beginning 29 August.
During Brunei sultan Hassanal Bolkiah's visit to Bangladesh in October an agreement is expected to be signed on oil imports.