Bangladesh prefers to import Russian oil via a third country

Bangladesh may prefer to import Russian oil via a third country to avert possible risks of the business.

According to official sources at the Ministry of Power, Energy and Mineral Resources, neighbouring India might be such a preferred third country with regard to importing Russian oil.

"Currently, India has been importing Russian oil defying US sanctions, and Bangladesh has a long-term contract with India to import refined oil from its refinery in Numaligarh in Assam state,” an official at the ministry said, wishing not to be named.

“If there is a bilateral arrangement between the two nations, such a business is very much possible,” he said, adding it could be a possible way to avert the risk in import of Russian oil at a cheaper rate.

The possibility of importing petroleum fuel from Russia came into discussion at the policymaking level following an offer from a Russian company to sell its refined petroleum, especially diesel, at a cheaper rate to Bangladesh.

Russneft, a Russian oil company headquartered in Moscow, recently offered the state-owned Bangladesh Petroleum Corporation (BPC) petroleum fuels at $59 per barrel against a global market price of over $100 per barrel.

As per the offer, the Russian company will send its refined petroleum to Chittagong port at the rate which includes the premium and shipping cost as well.

However, the Ministry of Power, Energy and Mineral Resources has not yet officially disclosed anything about the Russian company’s offer.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid declined to give any detail about such an offer.

“No more update as of yet,” he told UNB on Thursday.

Sources at the BPC said the import of Russian oil is not like fuel import from other countries.

They said Bangladesh is assessing possible risks in importing petroleum fuels from Russia as such imports may invite anger from the US and its Western allies.

Russia has been facing economic sanctions from the US and its European allies following its invasion of Ukraine.

If any country directly imports Russian oil, it may also face similar sanctions, said the officials, adding that is why any move in this regard will not only depend on the decision of the Ministry of Power, Energy and Mineral Resources.

According to official sources, after receiving the offer from Russia on petroleum fuel sale, different ministries concerned, including the Ministry of Foreign Affairs, Ministry of Finance, and the Ministry of Power, Energy and Mineral Resources, are assessing the potential risks and different processes of such import.

Prime Minister Sheikh Hasina at an Ecnec meeting on August 16 said the government wants to buy fuel oil, fertilizer and wheat from Russia.

In this connection she mentioned she gave the responsibility to her principal secretary to talk to the Russian ambassador regarding the matter.

“The foreign ministry can take initiative in this matter, we will procure fuel oil from them (Russia) with our own funds as SWIFT is closed and the price of dollar is very high,” she said.

Meanwhile, Power Cell Director Mohammad Hossain said if the government can manage the import of diesel at a cheaper rate, operation of diesel-run power plants will be resumed to increase the power generation.

As part of an austerity measure, the government suspended the operation of the diesel-fired power plants on July 19 and introduced area-wise loadshedding to reduce diesel imports and save foreign currency.

Although area-based loadshedding was scheduled for one hour, it continued for three hours at a time in some city areas across the country. Loadshedding in rural and remote areas, however, stretched for more hours, consumers claim.

Markets and shopping malls can now stay open until 8pm. The government has also prohibited illumination in different social gatherings in community centres, shopping malls, shops, offices and houses since July 7.

It also introduced a holiday staggering for industries on August 11 as part of the plan to save power and natural gas.

Dhaka Tribune