Private importers of furnace oil are allegedly flouting government directives and such freewheeling could result in loss of revenue and market manipulation. Official sources said the private-sector players in a partially-deregulated import were not caring to inform the authorities concerned about the imports. Currently, around a dozen private power-plant sponsors are importing furnace oil to the tune of 1.0 million tonnes a year independently from the international market to run their plants. But they are not providing any information to any state agencies during the import, which is a “flagrant violation of the government directives”, market-insiders said. As per the set of dos spelt out by the government, the private-sector importers were supposed to inform state-run Bangladesh Petroleum Corporation (BPC) about each of their import consignments, a senior BPC official told Monday. They were also to inform the state-run Bangladesh Power Development Board (BPDB) about the fuel-oil import. “But the private importers inform BPDB only when they want their money back from the latter against their imports,” said the official. BPC officials said if the private sector continued importing furnace oil through violating the government rules, there could be a mismatch in the supply chain inside the country. “The private sector could manipulate the quantity of the furnace-oil imports as well as the prices in absence of monitoring,” the corporation official further said. Private sector is currently enjoying exemption from paying duties on imports of furnace oil. In what is seen as a double boon, they are also getting 9.0 per cent service charge along with the import costs from the power board. BPC has already withdrawn from import of furnace oil from 2016 to make room for private importers. Trading in furnace oil was one of BPC’s major profit-making ventures. The shift means private sector would import all the required furnace oil in 2016 to meet the country’s mounting needs to feed power plants. BPC imported around 600,000 tonnes of furnace oil in 2015. Officials said BPDB has to spend less for furnace-oil purchase by private sector as the price is lower than what BPC used to charge. He said BPC-rated furnace-oil price is over double the price at which it buys from the private-sector players in the oil trade. BPC has sold furnace oil to power plants at a government-fixed price of Tk 60 per litre (US$ 76 cents/litre) since December 2011. But private sector can import furnace oil at rates as low as Tk 25 per litre by taking advantage of the rock-bottom oil prices on the international market. The power board started taking less furnace oil from the BPC in March 2015. Officials said BPC had begun importing furnace oil from around mid-2010 to meet a growing demand from new oil-fired power plants. Previously, it was a regular furnace-oil exporter to international market. It used to export the fuel which was produced from the refinery owned by its subsidiary, Eastern Refinery Ltd (ERL), located in the port city of Chittagong. Bangladesh currently has some 39 operational oil-fired power plants, of which 28 with an overall generation capacity of 2,133 megawatts (MW) run on furnace oil. The petroleum corporation had earlier negotiated term deals with Kuwait Petroleum Corporation, Petco, the trading arm of Malaysia’s Petronas, Emirates National Oil Company, or ENOC, Philippines National Oil Company, or PNOC, PetroChina, Unipec Singapore Ltd, Vietnam’s Petrolimex, Indonesia’s PT Bumi Siak Pusako and Brunei’s PB Trading to import furnace oil.
– From FE