Hasina, Modi to jointly open today for importing diesel from Assam

Prime Minister Sheikh Hasina will jointly inaugurate a 131.57-km cross-border 'Indo-Bangla Friendship Pipeline' with her Indian counterpart Narendra Modi today (Saturday) to import diesel from Indian State of Assam through a video conferencing.

As part of the energy sector cooperation between Bangladesh and India, the two neighbouring nations built the pipeline to annually import 250,000 tonnes to 400,000 tonnes of diesel for the next 15 years, which was built under Indian line of credit (LoC).

"It will help us to address the energy crisis in the country's northern part, we estimate that the pipeline will help to increase fuel supply by 29,000 tonnes in 16 districts of the country," State Minister for Power, Energy and Mineral Resources Nasrul Hamid said.

Bangladesh will get the diesel from India's Numaligarh Refinery, located in Golaghat in north-eastern Indian state of Assam, while Bangladesh will receive it at Parbatipur Petroleum Fuel Depot in north-western district of Dinajpur.

Through this pipeline Bangladesh will annually import 250,000 tonnes in the first three years, 300,000 tonnes annually in the 4th to 6th years, 350,000 tonnes annually in the 7th to 10th years and 400,000 tonnes annually from the 11th to 15th year, according to the deal.

Bangladesh has been importing 22,000 tonnes of diesel per month through railway wagons from Assam. Bangladesh annually needs to import 6.6 million tonnes to 7.7 million tonnes of petroleum to meet its demand.

"The Indian government has provided about Rs 303 crore as loan under Indian line of credit (LoC) to built the 131.57-km cross-border pipeline of it, some 126.57-km lies in Bangladesh while the remaining 5-km was installed in India. However, Bangladesh will operate the pipeline in its part while India will operate the pipeline in its portion," an Energy Division Official said.

Under the Special Act, the deal was signed in August, 2017 following the approval of the Cabinet Economic Affairs Committee.
Officials said Dhaka had to first sign a 'Sales & Purchase Agreement' (SPA) to receive New Delhi's financial support as a pre-condition.

According to the deal the 'premium' or transportation cost of the petroleum was fixed at US$5.5 per barrel of diesel and the price of petroleum will be fixed on the basis of price on the international oil market.

The officials said when such a deal was signed Bangladesh was spending $4.4 per barrel to import diesel from overseas through vessels.

Bangladesh Petroleum Corporation (BPC) Chairman ABM Azad told the media that the premium is cheaper compared with import cost from overseas as Bangladesh has to spend $12 per barrel as premium to import diesel.