Bangladesh is likely to ink a long-term contract with India to import 1m tonnes of diesel per year spending more than double the international competitive rates on transport and insurance.
State minister for power, energy and mineral resources Nasrul Hamid and India’s state minister for petroleum and natural gas Dharmendra Pradhan at a meeting in New Delhi on Wednesday agreed in principle that the premium for each tonne of diesel should be approximately $46, an energy division official told New Age.
He said that India’s state-run Bharat Petroleum Corporation Limited took a firm stand to realise $46 in premium which included transport and insurance for supplying each tonne of diesel to Bangladesh Petroleum Corporation.
He, however, did not reveal the tenure of contract under which Numaligarh Refinery Limited, a subsidiary of Bharat petroleum, would supply up to 1m tonnes of diesel a year from its refinery located at Golaghat in Assam to Bangladesh’s Parbatipur oil depot in Dinajpur.
Diesel would be supplied through a 130km pipeline, of which Bangladesh Petroleum Corporation would install 125km pipeline, said officials, adding that the pipeline project would cost approximately Tk 600 crore.
The country needs 3.5m tonnes of diesel a year, of which approximately 3m tonnes is imported while the rest is met by refining imported crude, the officials said.
The meeting decided to form a committee with officials from both the countries to finalise the contract, said an energy ministry release.
In April, the corporation engaged Emirates National Oil through competitive bidding to supply 6,60,000 tonnes of diesel to Chittagong depot at a premium of $20.03 per tonne that included the costs for transport and insurance.
Emirates Oil supplies diesel from the Middle East countries.
On March 19, corporation imported 2,200 tonnes of diesel from Numaligarh Refinery paying more than $59 per tonne in a ‘goodwill gesture’ through rail links. The supply was made on trial basis.
At that time, Nasrul Hamid told reporters that the government accepted the high rate of premium considering India’s contributions to the 1971 War for Independence.
On October 2, the state minister with an 18-member team left Dhaka to New Delhi to a settle a number of issues including the contract for diesel import, a long-term bilateral deal on energy cooperation and unsolicited investment proposals from India’s Adani and Reliance groups in energy sector.
The team would also work out ways for smooth implementation of Rampal coal-fired power project, 14km off the Sunderbans, in a meeting of joint steering committee on energy.
The team includes power division secretary Monwar Islam, corporation chairman Md Mahmud Reza Khan and other officials of power and energy ministry.
On Wednesday, Nasrul also met Piyush Goyal, state minister for power, coal, new and renewable energy and mines.
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