Abnormal surge in diesel demand raises eyebrows

BPC asks DCs of bordering dists to check smuggling

An abnormal surge in diesel demand has prompted the state-owned Bangladesh Petroleum Corporation (BPC) to launch an internal probe as it suspects diesel is being smuggled to neighbouring India. Data from the BPC show that the diesel demand in March was 4,97,000 metric tonnes, whereas the demand was 3,90,000 metric tonnes in February. In March last year, the demand was 3,67,186 metric tonnes.

The Bangladesh government currently imports a consignment of 30,000 tonnes at Tk 170 core.

So, a sudden increase in diesel demand by about 1,00,000 metric tonnes, which costs more than Tk 550 crore, in

just one month has raised concern among the top officials

of the BPC.

Bangladesh usually ships in 3.2 million tons of diesel

oil annually.

Terming this increase in use as “quite abnormal”, BPC officials sought the intervention of the deputy commissioners (DCs) of bordering districts to check smuggling of fuel oil across the border.

An official with the BPC told The Independent that the oil demand in the petroleum filling stations in the bordering areas increased significantly over the last month.

They have asked the Border Guard of Bangladesh (BGB) to keep an eye on some 100 petrol stations near the border.

The BPC has also ordered the petrol stations near the country’s border to

provide them with sales data so that they can analyze and figure and ascertain the possible cause of this sudden surge.

BPC suspects that the a nexus is involved in illegally smuggling diesel to neighbouring India, where it fetches about Tk 22 more for per litre.

Petroleum products are being smuggled to India in both bulk and retail quantities due to the substantial price gap, said a BPC source.

Diesel currently costs Tk 65 per litre in Bangladesh, whereas the price for the same amount is Tk 87.34 in neighbouring India, creating a significant Tk 22.34 gap.

Oil prices in Bangladesh are fixed by the government through executive order and the last change was made on April 24, 2016. In India, the oil price is determined in accordance with movements in the international market, said a high official from the BPC.

The BPC is presently incurring a loss of about Tk 12 per litre, adding up to more than Tk 300 crore per month, as the corporation buys oil from the international market at higher prices and sells the products at lower prices in the domestic market. After a phase of low oil price prevailing in the international market over the last three years since late 2014, international oil prices started rising since mid-June last year due to oil production cuts by some of the major oil exporters and international political turmoil.

Abnormal surge in diesel demand raises eyebrows

BPC asks DCs of bordering dists to check smuggling

An abnormal surge in diesel demand has prompted the state-owned Bangladesh Petroleum Corporation (BPC) to launch an internal probe as it suspects diesel is being smuggled to neighbouring India. Data from the BPC show that the diesel demand in March was 4,97,000 metric tonnes, whereas the demand was 3,90,000 metric tonnes in February. In March last year, the demand was 3,67,186 metric tonnes. The Bangladesh government currently imports a consignment of 30,000 tonnes at Tk 170 core. So, a sudden increase in diesel demand by about 1,00,000 metric tonnes, which costs more than Tk 550 crore, in just one month has raised concern among the top officials of the BPC. Bangladesh usually ships in 3.2 million tons of diesel oil annually. Terming this increase in use as quite abnormal, BPC officials sought the intervention of the deputy commissioners (DCs) of bordering districts to check smuggling of fuel oil across the border. An official with the BPC told The Independent that the oil demand in the petroleum filling stations in the bordering areas increased significantly over the last month. They have asked the Border Guard of Bangladesh (BGB) to keep an eye on some 100 petrol stations near the border. The BPC has also ordered the petrol stations near the countrys border to provide them with sales data so that they can analyze and figure and ascertain the possible cause of this sudden surge. BPC suspects that the a nexus is involved in illegally smuggling diesel to neighbouring India, where it fetches about Tk 22 more for per litre. Petroleum products are being smuggled to India in both bulk and retail quantities due to the substantial price gap, said a BPC source. Diesel currently costs Tk 65 per litre in Bangladesh, whereas the price for the same amount is Tk 87.34 in neighbouring India, creating a significant Tk 22.34 gap. Oil prices in Bangladesh are fixed by the government through executive order and the last change was made on April 24, 2016. In India, the oil price is determined in accordance with movements in the international market, said a high official from the BPC. The BPC is presently incurring a loss of about Tk 12 per litre, adding up to more than Tk 300 crore per month, as the corporation buys oil from the international market at higher prices and sells the products at lower prices in the domestic market. After a phase of low oil price prevailing in the international market over the last three years since late 2014, international oil prices started rising since mid-June last year due to oil production cuts by some of the major oil exporters and international political turmoil.