The country’s only state-owned oil refinery, Eastern Refinery PLC Limited (ERL), has suspended its refining operations due to a shortage of crude oil.
According to officials concerned, operations were halted on Sunday afternoon after the last round of production.
Sources at the Bangladesh Petroleum Corporation (BPC) said that the last shipment of crude oil arrived in the country on February 18. No crude oil has been imported for 54 consecutive days.
ERL officials stated that crude oil imports have virtually remained suspended for nearly two months following the outbreak of war in the Middle East, making it impossible to continue production due to a lack of raw materials.
The Energy Division, however, said that there is sufficient stock of refined petroleum products in the country, and there will be no immediate impact on the supply system.
However, concerned officials warned that a prolonged shutdown of ERL could create pressure on the supply chain.
Production Attempt Using Residual Stock:
To keep operations running, ERL recently used around 5,000 tons of oil accumulated in the Single Point Mooring (SPM) pipeline at Moheshkhali, along with residual oil (deadstock) from storage tanks.
This type of oil is usually considered risky to use directly, as it contains impurities and waste materials.
The impurities in deadstock can clog pumps and damage machinery, making it unsafe for prolonged use.
Although the usable limit of tank residue is typically 1.5 meters, it dropped below 1 meter on Sunday, making continued production impossible.
Production Was Reduced Earlier:
ERL typically refines about 4,500 tons of crude oil daily. However, due to the ongoing crisis, production was reduced to 3,500 tons per day from last month.
At the final stage, usable reserves fell below 2,000 tons.
New Shipment via Alternative Route:
BPC has confirmed securing a shipment of 100,000 tons of crude oil from Saudi Aramco, for which a letter of credit has already been opened.
The shipment is scheduled to be loaded from the Fujairah port in the UAE on April 21. It is expected to reach Bangladesh in the first week of May, possibly via the Arabian Sea while avoiding the Persian Gulf.
ERL primarily refines Saudi Arabian “Arabian Light” and UAE’s “Murban” crude oil.
Meanwhile, a proposal to import 100,000 tons of refined oil from a Malaysian company has been approved, though the cost has not yet been finalized.
Stock Situation:
According to BPC, Bangladesh imports around 6.5 to 6.8 million tons of fuel annually. Of this, about 1.5 million tons is crude oil, which is refined at ERL.
The remaining approximately 4.5 million tons of refined fuel is directly imported from countries including the Middle East, India, Malaysia, Singapore, and China.
In March, 17 vessels carrying different types of fuel arrived at Chattogram port. Among them, over 231,000 tons of diesel were imported from Malaysia and Singapore. Several shipments have also arrived in April.
No Immediate Crisis:
The Energy Division stated that despite the shutdown of ERL, there will be no major disruption in fuel supply for now.
Following the outbreak of war, the government increased imports of refined petroleum products, even at higher prices, to ensure adequate stockpiles.