The government is set to start importing refined petroleum products at lower costs under the re-introduced open tendering that would replace the purchase under term deals.
Under the new procurement system, the BPC has picked up best offers from ENOC and Unipec for oil supply.
The state-owned Bangladesh Petroleum Corporation (BPC) has already recommended awarding tender to Emirates National Oil Company (ENOC) and Unipec Singapore Pte Ltd to get supply of 1.50 million tonnes of refined petroleum products altogether in 2016, BPC’s director for operations and planning Mosleh Uddin told the FE Tuesday.
“We have completed the evaluation and found the best offers from the ENOC and Unipec responsive,” he said.
The BPC board has approved the proposal to award the supply orders to the firms. The proposal has now been sent to the cabinet committee on government purchase, he said, adding that fuel import deal would be inked after getting the final approval from the purchase committee.
They quoted lower premium rates which are around 25 per cent less compared to the premium rates under the existing term deals.
Premium rate is a component of oil-pricing mechanism under CFR (cost and freight) basis which includes the costs of fuel freight, insurance and evaporation as well as loading and unloading losses.
ENOC quoted the best bid to supply 660,000 tonnes of 0.05 per cent sulphur gasoil (diesel) and 100,000 tonnes of A-1 jet fuel under one tranche named ‘Group A’ while Unipec’s offer was the best for the second tranche named ‘Group B’ to supply 660,000 tonnes of 0.05 per cent sulphur gasoil and 80,000 tonnes of A-1 jet fuel.
In its bid, ENOC offered a premium rate of $2.37 per barrel to Mean of Platts Arab Gulf (MoPAG) gasoil assessments for 0.05 per cent sulphur gasoil and $3.54 per barrel to MoPAG assessment for A-1 jet fuel.
Unipec in its bid offered a premium rate of $2.57 per barrel to Mean of MoPAG gasoil assessments for 0.05 per cent sulphur gasoil and $3.06 per barrel to MoPAG assessment for A-1 jet fuel.
Currently, the BPC imports 0.05 per cent sulphur gasoil at the premium rate of US $4.40 per barrel to MOPAG gasoil assessments, on CFR (cost and freight) basis, for January-June 2016 period.
The state-run corporation imports jet fuel at a premium rate of $5.40 per barrel as per MOPAG jet fuel assessment.
BPC got 12 bids from global oil suppliers in late February under open tendering system to source oil after 15-year hiatus.
US’s ExxonMobil, Dutch’s Trafigura, Thai state-run PTT Public Company Ltd, Malaysian state-run Petronas, South Korean SK Energy, Petro China, Swiss Singapore Overseas Enterprises Pte Ltd, and Glancore were other bidders that submitted bids.
The offers of Unipec and ENOC would remain valid for 60 days.
BPC is planning to start importing the petroleum products from May and continue until December, said Mosleh Uddin.
This is the BPC’s first import tender for oil products since 2000. The company had been buying gasoline, gasoil, jet fuel, superior kerosene and 180 CST high sulphur fuel oil solely under direct term deals with international suppliers.
Officials said the pricing formula of petroleum products is common which is based on the MoPAG assessments for five days. It means that the price is fixed at the average price of early two and post two days of MoPAG assessment rates including the date when the fuel is delivered.
MoPAG is the benchmark in oil pricing prepared by Platts, a US-based energy information provider and analyst.
The corporation currently imports different types of refined petroleum products through term deals where the pricing formula is maintained as per MoPAG formula.
But the premium rates are fixed through negotiations with suppliers on half-yearly basis.
The corporation imported around 5.50 million tonnes of crude oil and refined oil products combined in 2015.
Of the total amount, 1.4 million tonnes accounted for crude oil that BPC imports under term contracts with Saudi Aramco and Abu Dhabi National Oil Company (ADNOC), for the country’s sole refinery.