Import of petroleum products

BPC reopens tender process after 13yrs

After 13 years of the import of petroleum products through government-to-government (G2G) negotiations, Bangladesh Petroleum Corporation (BPC) recently cancelled the G2G provision and reopened the tender process. A total of 16 international organisations have purchased the tender schedule to import petroleum products for the state-owned corporation, and they will submit the tender schedules on February 22, sources in the BPC said. BPC on February 11, 2016 floated an international tender to import petroleum products. The last date for purchasing the tender schedule was February 18.
Talking to The Independent, Mosleh Uddin, Director of Operation and Planning of BPC informed that BPC wished to procure 9.875 million barrels (13,20,000 tonnes) of import refined diesel (GASOIL) and 1.440 million barrels (18,0000 tonnes) of Jet A-1.
He said the government believed the premium rate would be lower for importing oil through international tenders instead of G2G purchase. It is to be noted that the state-owned BPC incurred huge losses after introducing the G2G system in 2003-04.
Until 2003, the BPC imported petroleum products through tenders and negotiated premium rates for transportation, insurance and other costs every six months. Recently, it imported refined diesel with a premium of $4.50 per barrel. BPC introduced the state-level negotiation in fiscal year 2003-04, enforced fully in 2005. Data shows that losses incurred by the state-owned organisation were much lower under the competitive market tender policy.
Under government-level contracts, the BPC closes minimum two-year deals with foreign government oil companies, reviewing the premium or transport, insurance and other costs of the deals every six months. However, the seemingly “reliable” mode of procurement has massively increased the state oil importer’s losses.
In FY2011-12, the BPC faced the  highest losses ever, Tk105.52bn for 5.18m tonnes of oil. When it procured oil under the competitive market tender policy in FY2003-04, it lost only Tk9.6bn on 3.52m tonnes. The BPC has been importing about 5 million tonnes of fuel oil worth about $3 billion every year from 13 countries under the G2G deals. It made a profit of Tk 3,500 crore in 2014-15 when oil plummeted between $40 and $50 per barrel from $117. In 2011-12, it incurred a record Tk105.52bn loss. In 2003-04, the amount was Tk9.6bn. Experts also believed that the decision to purchase oil through international tender instead of G2G deal will make BPC profitable in future. After the introduction of G2G negotiations, BPC’s annual losses have gone up 11 times in about 12 years to ensure energy security.
Talking to The Independent, Prof Dr Badrul Imam, Professor of Geology of Dhaka University lauded the decision to start the tender process instead of the G2G deal as it would ensure transparency. He also opined ‎that the premium would get lower with the provision of oil import through international tenders instead of G2G export.

Import of petroleum products

BPC reopens tender process after 13yrs

After 13 years of the import of petroleum products through government-to-government (G2G) negotiations, Bangladesh Petroleum Corporation (BPC) recently cancelled the G2G provision and reopened the tender process. A total of 16 international organisations have purchased the tender schedule to import petroleum products for the state-owned corporation, and they will submit the tender schedules on February 22, sources in the BPC said. BPC on February 11, 2016 floated an international tender to import petroleum products. The last date for purchasing the tender schedule was February 18. Talking to The Independent, Mosleh Uddin, Director of Operation and Planning of BPC informed that BPC wished to procure 9.875 million barrels (13,20,000 tonnes) of import refined diesel (GASOIL) and 1.440 million barrels (18,0000 tonnes) of Jet A-1. He said the government believed the premium rate would be lower for importing oil through international tenders instead of G2G purchase. It is to be noted that the state-owned BPC incurred huge losses after introducing the G2G system in 2003-04. Until 2003, the BPC imported petroleum products through tenders and negotiated premium rates for transportation, insurance and other costs every six months. Recently, it imported refined diesel with a premium of $4.50 per barrel. BPC introduced the state-level negotiation in fiscal year 2003-04, enforced fully in 2005. Data shows that losses incurred by the state-owned organisation were much lower under the competitive market tender policy. Under government-level contracts, the BPC closes minimum two-year deals with foreign government oil companies, reviewing the premium or transport, insurance and other costs of the deals every six months. However, the seemingly reliable mode of procurement has massively increased the state oil importers losses. In FY2011-12, the BPC faced the highest losses ever, Tk105.52bn for 5.18m tonnes of oil. When it procured oil under the competitive market tender policy in FY2003-04, it lost only Tk9.6bn on 3.52m tonnes. The BPC has been importing about 5 million tonnes of fuel oil worth about $3 billion every year from 13 countries under the G2G deals. It made a profit of Tk 3,500 crore in 2014-15 when oil plummeted between $40 and $50 per barrel from $117. In 2011-12, it incurred a record Tk105.52bn loss. In 2003-04, the amount was Tk9.6bn. Experts also believed that the decision to purchase oil through international tender instead of G2G deal will make BPC profitable in future. After the introduction of G2G negotiations, BPCs annual losses have gone up 11 times in about 12 years to ensure energy security. Talking to The Independent, Prof Dr Badrul Imam, Professor of Geology of Dhaka University lauded the decision to start the tender process instead of the G2G deal as it would ensure transparency. He also opined that the premium would get lower with the provision of oil import through international tenders instead of G2G export.