Bangladesh Russia offers to sell oil to Bangladesh

[Isa Khan]

Bangladesh is reviewing a Russian proposal to sell crude oil to the South Asian nation, according to State Minister for Power, Energy and Mineral Resources Nasrul Hamid.​

The United States, Britain and some other key oil buyers banned imports of Russian oil shortly after the invasion of Ukraine. The European Union is finalising a further round of sanctions, including a ban on Russian oil purchases. Many European refiners have already stopped buying from Russia for fear of running afoul of sanctions or drawing negative publicity.

The low price of Russia’s oil -- spot differentials are about $29 less per barrel compared with before the invasion -- is a boon for many refiners as they face shrinking margins. The price is well below competing barrels from the Middle East, Africa, Europe and the United States.

India’s purchases of Russian crude have soared since the conflict’s start, rising from nothing in December and January to about 300,000 barrels a day in March and 700,000 a day in April. The crude now accounts for nearly 17 percent of Indian imports, up from less than 1 percent before the invasion. Last year, India imported about 33,000 barrels a day on average from Russia, according to The New York Times.

Prices of oil in the world market have fallen slightly. Duty-free facilities on oil imports from neighbouring India have also lowered the price, Hamid said on Monday after opening a workshop at the Power Bhaban.

Asked whether Bangladesh was considering a lowering of the prices, Hamid said they wanted to keep the rate stable.
“We don’t want to raise or lower it. The recent decline is enough to keep it affordable.”

Hamid said he believes that electric buses and trains should replace oil-run public transport in order to reduce the significant impact of fuel prices on users.

“In future, we must take initiatives to introduce electric buses and other electric forms of public transport. The railways could even introduce electric trains if they want to.”

The government plans to shut down several oil-based power plants next year, Hamid said.

“Several gas-based and coal-based power plants will become operational next year. Because of that, we should be able to shut down oil-based power plants. This will reduce costs.”

The ongoing dollar crisis had impeded imports, but the issue has largely been resolved, he said.

“Bangladesh Bank is obliged to give dollar discounts on state purchases,” he said. “When we want to get a line of credit from a bank, they are obliged to supply them with dollars. The matter has been discussed.”

However, the state minister also noted that the worldwide crisis in shipping has also hampered the transport of fuel.

Russia offers to sell oil to Bangladesh

Bangladesh is reviewing a Russian proposal to sell crude oil to the South Asian nation, according to State Minister for Power, Energy and Mineral Resources Nasrul Hamid.

bdnews24.com

 

[Isa Khan]

Bangladesh's refinery is not technically capable of using Russian crude oil, said State Minister for Power, Energy and Mineral Resources Nasrul Hamid.

He made the comment a day after Foreign Minister AK Abdul Momen said that Bangladesh is not taking oil from Russia in fear of sanctions.

Nasrul Hamid had earlier said that Russia offered to sell crude oil to Bangladesh amid reduced demands from European countries.

Today, replying to a question in this regard, the energy state minister said, "We got offers from different sources, but we checked and found that our refinery is not technically capable of using Russian crude oil as it is designed for oil from Arab countries."

He attended a "meet the press" programme at Dhaka's Bidyut Bhaban on the occasion of the golden jubilee of the Bangladesh Power Development Board.

"Although the price of oil in the international market is fluctuating, there is no shortage of oil reserves at our end," he said.

Nasrul Hamid said, Bangladesh is buying oil as usual under the long-term G2G (government to government) agreements with countries including Saudi Arabia and UAE.

Bangladesh’s refinery not capable of using Russian crude oil

Bangladesh’s refinery is not technically capable of using Russian crude oil, said State Minister for Power, Energy and Mineral Resources Nasrul Hamid.

www.thedailystar.net

 

[Isa Khan]

Prime Minister Sheikh Hasina has instructed concerned ministries to find out a way for importing crude oil from Russia amid fuel crisis in the country.

"Mentioning that neighbouring India is importing oil from Russia with non-dollar payment, the premier has asked ministries to find a way for importing oil from Russia with own currency," Planning Minister MA Mannan told the media after Ecnec meeting today.

"PM Sheikh Hasina also said she fully understands the sufferings of the people caused by the recent hike in fuel oil prices and power rationing, and assured that the government will surely adjust fuel prices once they drop in the international market," he added.

The minister also said there will be no loadshedding from September.

"The USA now seems to be soft on the embargo it imposed on importing Russian oil as we see Germany and India are importing oil from Russia. We hope there will be no problem if we import too," said State Minister for Planning Shamsul Alam.

Find ways to get Russian oil: PM tells ministries

Prime Minister Sheikh Hasina has directed the relevant ministries and departments to figure out a way to import fuel oil from Russia in their own currency. The PM gave the order during the Executive Committee of the National Economic Council (Ecnec) meeting on Tuesday.

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[Isa Khan]

Foreign Secretary Masud Bin Momen has said that an expert delegation from Russia will be visiting Dhaka soon to decide on the issue of crude oil import from there.

"Russian experts will visit the existing oil refineries in Bangladesh and analyse the methods and usefulness of oil imported from Russia refining here," he told the journalists at Foreign Ministry Tuesday (16 August).

India is importing fuel oil from Russia, so Bangladesh may not have any technical problems in importing fuel oil from there, he added.

However, the foreign secretary mentioned that the country may lack capacity.

"If we can acquire the capacity to refine Russian crude oil, then we can also import oil from there. But that might be a bit time-consuming."

Masud Bin Momen said the delegation will observe the local refineries during their visit.

"We will work on updating the technical barriers that exist. We will soon sit with other ministries. Necessary coordination works will be completed swiftly," he told the journalists.

The foreign secretary noted that, in line with the instruction of Prime Minister Sheikh Hasina, the foreign ministry has started looking for cheaper oil sources across multiple regions.

Russian delegation to visit Bangladesh over crude oil import: Foreign Secretary

Foreign Secretary Masud Bin Momen has said that an expert delegation from Russia will be visiting Dhaka soon to decide on the issue of crude oil import from there. "Russian experts will visit the existing oil refineries in Bangladesh and analyse the methods and usefulness of oil imported from...

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• Move in response to Russia's refined oil offer
• BPC formed a committee to analyse Russian proposal
• The committee is now reviewing purchase conditions
• Bangladesh earlier turned down Moscow's crude oil supply proposal
• India and China are now buying Russian crude oil at 35% discounted prices
• Local refineries do not have capacity to refine Russian crude oil
• Russian team coming to assess possibility of upgrading refineries

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A Russian state-owned company has now offered to sell finished oil to Bangladesh as the South Asian country does not have capacity to refine Moscow's crude oil.

Rosneft Oil Company Russia gave the proposal last week, said a high official of the Bangladesh Petroleum Corporation (BPC), on condition of anonymity.

The price at which the company will supply oil could not be learnt immediately. But Bangladesh expects to get it at a reasonable price.

At present, China and India are procuring Russian crude oil at 35% lower than regular prices.

Currently, the BPC imports refined fuel from eight countries – Kuwait, Malaysia, the UAE, China, Indonesia, Thailand, Singapore and India.

The price of the refined oil is being determined by S&P Platts' rate, which is equal to the crude oil price rate plus $20-$24 premium per barrel.

When contacted, Nasrul Hamid, state minister for the Ministry of Power, Energy, and Mineral Resources, told The Business Standard, "We are receiving proposals from Russian state-owned companies and different countries. We need to look at how we can fulfil the conditions of these proposals.

"Earlier, we turned away the proposal of Russian crude oil as we do not have capability to refine that."

After receiving the latest proposal for refined oil procurement from the Russian company, the BPC had a meeting with the officials of Eastern Refinery Limited last week, more than one participant in the meeting told TBS.

The BPC is now scrutinising the proposal as Russia has given some conditions.

Led by Mostafa Quadrat Elahi, general manager (Commercial and Operations), a team was formed to analyse the proposal, said sources in the know.

However, Mostafa Quadrat could not be contacted over the phone.

Barriers to refining Russian crude oil

Managing Director of Eastern Refinery Md Lokman, told TBS, "We have received documents from Russia. After analysing the documents, we have reached a decision that it is not possible to refine Russian crude oil in our refinery as it has higher density than Middle Eastern crude oil."

The ERL is technically incapable of using Russian crude oil, he said.

"Furthermore, the Eastern Refinery Limited's plant is 54 years old, so it cannot be temporarily modified to refine Russian oil. The entire plant can go out of order if we modify it for Russian crude," he noted.

Asked whether it was possible to build a new refinery immediately to deal with the crisis and take advantage of the opportunity to obtain Russian oil, he said, "To build a new refinery may take five years."

However, Lokman said they may receive an oil sample from Russia to check again if it is suitable for Eastern Refinery.

He also suggested that Bangladesh add the option of refining Russian crude oil at the proposed Eastern Refinery Limited-2.

In 2010, the government decided to build the 2nd unit of the ERL to raise its refining capacity to 45 lakh tonnes annually to meet local demand.

But its proposal has been amended at least 10 times and the construction is yet to start.

"If we use Russian crude, some features will not match and we will not get the maximum output," the Eastern Refinery MD told TBS earlier.

The annual capacity of the state-owned Eastern Refinery Limited, built in 1968, is around 15 lakh tonnes, whose supplies have already been booked from Saudi Aramco and the United Ara.

Russian team coming to assess upgrading local refineries

A team of Russian experts will visit Dhaka soon to assess the possibility of upgrading the local refineries so that Russian oil can be refined here, Foreign Secretary Masud Bin Momen told a group of reporters on Tuesday.

Amid the Russian fuel's market loss following western sanctions, India is importing oil from Russia at a cheaper rate.

Bangladesh may not have any sanction-related problems in importing Russian crude oil, but it lacks the capability to refine it, he said.

"If we can develop the capacity to refine Russian crude oil, we can also import oil from there. But he admitted that it will take a long time," Masud Bin Momen added.

"A team of experts, coming to Dhaka in the next few days, will visit our refineries and work on updating the existing technical barriers.

"Since the instructions came today, we will soon sit with other ministries to complete the necessary coordination works expeditiously," he noted.

Russia now offers Bangladesh finished oil

Highlights: Move in response to Russia's refined oil offer BPC formed a committee to analyse Russian proposal The committee is now reviewing purchase conditions Bangladesh earlier turned down Moscow's crude oil supply proposal India and China are now buying Russian crude oil at 35% discounted...

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[Isa Khan]

Bangladesh Petroleum Corporation (BPC) is considering buying discounted diesel and jet fuel from Russia as it seeks relief from the elevated prices in the global market.

The development comes after Russian state-owned company ROSNEFT Oil in the last week of July sent a fresh proposal for exporting refined oil to Bangladesh instead of crude oil, said officials of the ministry of energy and mineral resources.

ROSNEFT is offering diesel at $59 a barrel, which is almost half the price of refined diesel in the international market.

"We are seriously considering the issue in the current global context," said a top official of the BPC on the condition of anonymity due to the sensitivity of the matter.

With the view to keeping its economy afloat following Western sanctions on Moscow to force an end to Ukraine invasion, Russia is offering its Urals at steep discounts to compensate for the risks and costs associated with transporting its oil.

Earlier in June, Russia had approached Bangladesh for purchasing its Urals at a discount.

But the country could not take up on the offer -- like India and China have -- as Eastern Refinery, the lone refinery, is configured to process only crude oil from the Middle East.

Now, ROSNEFT Oil has made an offer to Bangladesh via the Russian embassy in Dhaka that addresses the problem.

Technical experts of BPC and Eastern Refinery are working on the feasibility of importing refined fuel from Russia, the BPC official said.

ROSNEFT Oil has sent in specifications for diesel, octane and jet fuel.

"The items are being checked for compatibility with our conventional fuel oil."

The refined fuel specifications sent by ROSNEFT have higher sulphur content, said an energy ministry official who participated in the meeting with the Russian state-owned company's officials on Friday.

Officials of BPC and ROSNEFT Oil will meet later this week to take a decision.

"We have addressed the issue to ROSNEFT. They will inform us about this in the next meeting," he added.

There are some similarities between the specifications of Russian diesel and the ones currently imported from other countries, said Mohammad Lokman, managing director of Eastern Refinery.

"We are working on the other technical issues," he said.

BPC plans to import discounted Russian diesel, jet fuel

Bangladesh Petroleum Corporation (BPC) is considering buying discounted diesel and jet fuel from Russia as it seeks relief from the elevated prices in the global market.

www.thedailystar.net

 

[Isa Khan]

About 50 litres of sample refined fuel oil from Russia arrived at the Shahjalal International Airport in Dhaka on Wednesday, the Bangladesh Petroleum Corporation (BPC) said yesterday.

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 in Chattogram for tests, BPC officials told The Business Standard.

A senior BPC official, requesting not to be named, told TBS that the sample has been sent by the Rosneft Oil Company, which is a Russian integrated energy company. The sample has been delivered to a postal company named Difutr OU.

Khalid Ahmed, director (Operations & Planning) at the BPC, told TBS that they have heard that a sample delivery reached Dhaka.

"But we are yet to receive the delivery. So, we do not know how much the quantity is," he said.

Talking about the progress of Russian refined fuel, Khalid said they are still analysing the pros and cons of the proposals that include invoice, freight cost and load point of the fuel.

"Even if the government decides to import Russian fuel, it won't be possible to receive it before next January as the import schedule is occupied till December with the existing suppliers," he further added.

Currently, the BPC imports refined fuel from eight countries – Kuwait, Malaysia, the UAE, China, Indonesia, Thailand, Singapore and India.

The BPC received proposals from various companies regarding the import of oil from Russia.

The corporation is looking at the issue of how to get the oil by initially selecting three companies.

A discussion is underway with the ministry and the companies 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 this situation, various countries, including India and China, are buying oil from Russia at a low price.

Amid this, Russia also offered Bangladesh to buy its crude oil in March and refined oil last May.

Sources at the BPC said for crude oil, 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.

Meanwhile, in order to import cheaper oil from Russia, on August 16 Prime Minister Sheikh Hasina directed the relevant ministries and departments to figure out a way to import fuel oil from Russia.

Following her directives, the BPC formed a committee to scrutinise the scope to import Russian oil - that includes its price, payment method, currency, fuel loading point etc.

Khalid Ahmed said a team is working on the issue. But he did not give any specific time when the committee will submit their report.

Sample of Russian oil arrives in Dhaka

If the government okays fuel import from Russia, it may take next January to start

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[Isa Khan]

The government has been discussing at various levels to track down a way to import oil from Russia at a cheaper rate. It was even considering the use of an alternative currency to avail Russian oil in these trying times.

However, the string of discussions bore no fruit as a high-level meeting at the secretariat on Thursday reached a decision that it is quite impossible to import oil from Russia using an alternative currency, instead of dollars.

The US and European sanctions on Russia restricted use of dollars to import oil from the country. Russia expressed its interest to sell oil through its own currency, but Bangladesh will not be able to arrange the whopping amount of Russian ruble required for the import.

Besides, there is a fear that the purchase of Russian oil may damage Bangladesh’s international relations. The meeting, in such a backdrop, asked the energy and mineral resources division to look into whether any oil can be imported from any other countries at a cheaper rate.

The meeting was held on Thursday at the cabinet division to review the method of payment for import of goods. Commerce Minister Tipu Munshi presided over the review meeting while Food Minister Sadhan Chandra Majumder, Land Minister Saifuzzaman Chowdhury, State Minister for Power, Energy, and Mineral Resources Nasrul Hamid, Prime Minister’s Private Industry and Investment Advisor Salman F Rahman, among others were present.

Prime Minister Sheikh Hasina, at an ECNEC meeting on 16 August, ordered to assess the possibility of importing oil from Russia at a cheaper rate and find out a way to pay the price by exchanging taka with ruble. The recent discussions took place following the prime minister’s order.

Several participants of the high-level meeting said they discussed the advantages and disadvantages of importing oil from Russia.

Russia expressed its interest to export oil to Bangladesh in its own currency, but the import process is too complex. It will be quite difficult for Bangladesh to arrange the Russian currency to pay the price of imported oil. However, there is another option for paying the price in greenbacks, if Bangladesh wants.

Trade relations between Bangladesh and Russia are not strong. And most importantly – it should consider the possible impact on international relations while importing Russian oil.

Upon completion of the meeting, Salman F Rahman told the reporters that Bangladesh cannot import oil from Russia defying the sanctions. The oil price is rising and this is why it needs to be imported from nations where the price is low.

The commodity prices have been rising in the international market for several months due to the Russia-Ukraine war and economic recovery after the Covid shock. It pushed up the import costs.
On the flip side, the remittance inflow slowed down in the previous fiscal year. The increasing demand for dollars pulled up its exchange rate against the local currency from Tk 86 to Tk 95 while its price crossed the Tk 115-mark in the open market.

Bangladesh registered a significant fall in forex reserve to meet the excess import costs, which created a big deficit in the balance of payment. So, the issue of using an alternative currency to combat the dollar-crisis came to the fore.

A participant related to the pharmaceutical industry told Prothom Alo on the condition of anonymity that the decision to import oil from Russia must be made politically. It is also part of diplomacy. Besides, it should consider how the western world will react if Bangladesh imports oil from Russia. A decision should be made after reviewing all possible impacts.

The meeting also discussed how India is importing oil from Russia despite sanctions by the western nations. The Indian government categorically said they will do whatever is best for the interest of their people.
Commerce Minister Tipu Munshi said after the meeting that the government is planning to import oil and other food grains from Russia and Ukraine and pay the price through banks that are making transactions with the two countries.

He said some 24 global banks have agreed to open letters of credit (LC) to import food grains from Russia and Ukraine. He also noted that there is no ban on the import of fertilisers and food grains from Russia and Ukraine.

The meeting decided to look into the possibility of purchasing oil at a cheaper rate from other countries or purchasing oil from a third party.

Ahsan H Mansur, executive director of Policy Research Institute (PRI) said the US and European countries might be unhappy if Bangladesh imports oil from Russia. The government can discuss the issue with those countries and take their opinion in this regard.

He also said the best option for Bangladesh is importing oil from a third party. It might be India, China, or Turkey.

Medicine export opportunity to Russia​

The Russia-Ukraine war has created a huge potential for drug export in Russia. The government, in Thursday’s meeting, sought to know whether the local manufacturers can grab the export potential or not.

Bangladesh exported drugs to Russia from 1993 to 2002. The drug traders said they will resume drug exports to Russia if there are trade potentials.

Beximco Pharma Managing Director Nazmul Hassan told Prothom Alo that no one now exports medicine to Russia. If the government cooperates, the traders will start the export process.

But it will take time as the drugs need to be registered in Russia. Besides, the process of export should be eased up, he added.

Salman F Rahman said, “A huge demand for drugs has been created in Russia. It is a great opportunity for us and we want to utilize it.”

No way to import oil from Russia

Govt is planning to import oil, other food grains from Russia, Ukraine and pay through banks linked to them

en.prothomalo.com

 

[Isa Khan]

The United States (US) has no objection to Bangladesh importing fuel oil from Russia, said Advisor to the Prime Minister for Power, Energy and Mineral Resources Dr Tawfiq-e-Elahi Chowdhury.

"I had a conversation with the US Under Secretary. I wanted to know if there is any restriction on the import of oil from Russia. He said there is no ban on oil, fertiliser and food by the United States. So we can assume that there is no problem in importing oil from Russia or other countries," Dr Tawfiq-e-Elahi Chowdhury said during a press briefing at the Prime Minister's Office on Wednesday (31 August).

Advisor to the Prime Minister for Power, Energy and Mineral Resources Dr Tawfiq-e-Elahi Chowdhury held a meeting with US Under Secretary of State for Economic Growth, Energy, and the Environment Jose W Fernandez at the US Department of State in Washington DC on Thursday (18 August).

"We think the United States will support us in importing fuel oil," he added.

He also said that hiking fuel prices by 42-51% was a good call considering the present situation.

"We cannot tell what will happen regarding fuel prices. Only God knows." he added.

"Awami League government is always concerned about the public, which is why fuel prices have been cut by Tk5," he further said.

On 5 August, the Energy and Mineral Resources Division hiked the diesel and kerosene price by 42.5% as well as petrol and octane price by 51%. The prices were adjusted on Monday (29 August) at consumer level in response to the lowering of import duty from 10% to 5% and the withdrawal of all advance taxes on diesel by the National Board of Revenue.

Fuel price hike has been one of the most discussed issues in the country that have further fueled the already high inflation, causing people to fall into grave distress.

The sanctions imposed on Russia by the US and its European allies since the Ukraine war broke out have disrupted global supply chains of fuel oil and gas, sending prices sky high. While most countries are scrambling to secure their fuel supplies, the crisis has opened new avenues for brisk business for a few.

As the sanctions reduced its market in the West since the Ukraine war, Russia is offering discounts on its fuel oil shipments. China, India, and even the world's second-largest oil producer Saudi Arabia are making the best use of the offer; they are buying cheaper Russian oils to meet domestic demand as well as exporting to Europe at much higher prices after refining.

Earlier, Prime Minister Sheikh Hasina directed the relevant ministries and departments to figure out a way to import fuel oil from Russia in their own currency.

Rosneft Oil Company, a Russian state-owned company, offered to sell finished oil to Bangladesh as the South Asian country does not have the capacity to refine Moscow's crude oil.

No US objection on Russian oil import

Bangladesh is looking into importing oil from Russia, said Advisor to the Prime Minister for Power, Energy and Mineral Resources Dr Tawfiq-e-Elahi Chowdhury

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