Petroleum import policy in offing

The Energy and Mineral Resources Division is preparing a policy for the import of petroleum, which may bring an end to Bangladesh Petroleum Corporation's (BPC) "monopoly" in selecting foreign suppliers.

Official sources said the division had proposed seven criteria in its draft policy in choosing the companies to import petroleum under the government-to-government deals.

It said a company must be 100 percent state-owned to become eligible to supply.

The company must have the annual export volume of minimum 2 million metric tonnes of petroleum having a turnover of $5 billion and 5 years' oil export experience.

The company should also not face any embargo by international agencies like the United Nations, Organization of the Petroleum Exporting Countries (Opec), or the World Trade Organization (WTO).

Another condition is the supplier must have a production sharing contract (PSC) with its own country or any other country.

However, nothing was said about the bidding process to choose a private supplier. Energy and Mineral Resources Division Deputy Secretary Farzana Momtaz said the proposed policy was not finalised yet.

At present, there is no specific policy or guideline for the import of petroleum from global markets, although the country has to import 5 million metric tonnes of both crude and refined petroleum. Crude oil accounts for 1.5 million, and the rest is refined oil.

For the last several years, the government has been importing refined oil from state-owned companies of different countries under state-to-state or G-to-G deals.

But there is no guideline about how much fuel should be imported from which companies or countries.

The practice is that the Bangladesh Petroleum Corporation (BPC), the state-owned petroleum importing agency, just negotiates with the companies and settles the quantity of import on a bilateral basis.

In this case, the BPC applies its arbitrary and discretionary power to determine the quantity of import and also the supplying source.

The matter came up for discussion in recent meetings of the Cabinet Economic Affairs Committee and Cabinet Purchase Committee, which felt the necessity of having a certain guideline and policy for petroleum import in approving such deals.

Some energy experts also feel that the government has to look into the quality, price and reliability of timely supply. Dr M Tamim, head of the Department of Petroleum and Mineral Resources Engineering at the Bangladesh University of Engineering and Technology (Buet), said it was still a matter of debate whether the import should be made under G-to-G deals or through open tenders.