Oil Import to Extend Oil-fired Plants


The government has already approved awarding of some new diesel and furnace oil-fired power plants with the total capacity of 2,555 megawatts over the next two years.

The country’s oil import volume is set to surge by one-third from the existing level, said officials.

According to Bangladesh Petroleum Corporation (BPC), the oil import is expected to increase from March 2018, as some 1,768-MW diesel and furnace oil-fired power plants are expected to come online by then.

BPC assumed that some 650,000 tonnes of diesel and 750,000 tonnes of furnace oil will be required to import for operating the new power plants, of which 800 megawatts diesel-fired and 968 megawatts furnace oil-fired.

The Cabinet Committee on Public Purchase (CCPP) on August has approved awarding these power plant projects to their respective sponsors under Speedy Supply of Power and Energy (Special Provision) Act 2010.

The law has a provision of providing immunity to people involved with the quick-fix remedies for power generation.

Earlier on April 05, CCPP also approved awarding seven new furnace oil-fired power plants to generate around 787 MW of electricity.

These power plants, awarded through the competitive tendering process, expected to add to the national grid by October 2019.

About 600,000 tonnes of furnace oil will be required to import annually for operating the power plants.

BPC imported petroleum products worth over Tk 270.23 billion in fiscal year (FY) 2014-15, which was Tk 365.87 billion in FY 2013-14.

Currently, the country imports around 3.50 million tonnes of diesel and 1.50 million tonnes of furnace oil per year to meet the domestic demands.

The country also imports around 5.90 million tonnes of crude oil and refined oil combined annually.

The country began expanding its oil-based power generation capacity in 2010, amid a natural gas deficit caused by depleting upstream reserves and rapid industrialization.

It brought almost 40 new oil-fired power plants online by the end of 2016.

Power Division has awarded many contracts to build gas-fired and coal-fired plants since 2012, but the delays of the projects forcing the government to extend the contracts of the oil-fired plants.

Currently, Bangladesh has over 50 operational oil-fired power plants, being run with diesel and furnace oil.

So, the government has decided to import 22,000 tonnes of diesel from India through the Indo-Bangla Friendship pipeline.

The consignment of the 500 ppm standard diesel from the Siliguri marketing terminal will be delivered to the Parbatipur oil depot.

A meeting of the Cabinet Committee on Economic Affairs approved the energy division’s proposal for the diesel purchase on August 23.

The diesel import will cost Tk 83.50 crore.

BPC recommended making a premium $5.5 for importing the diesel from Numaligarh Refinery Limited.

Bangladesh also imported 2,268 tonnes of diesel from India last year.

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