Open bidding to save BPC Tk 100cr on oil imports

Bangladesh Petroleum Corporation will save 41-66 percent for importing two petroleum products under open tender as opposed to a government-to-government arrangement.

The cabinet committee on purchase on Wednesday gave the go-ahead to BPC to import 1.3 crore barrels of gas oil and jet fuel under open bidding, which will be a first since 2005.

In so doing, the BPC would save upwards of Tk 100 crore, the committee found.

Emirates National Oil (Singapore) and Unipec Singapore were selected out of 13 companies that participated in the open tender for offering the lowest premium rates.

The premium is the cost of shipping the petroleum products and includes freight charges and insurance.

Since the going market rate is used as the price of petroleum, the suppliers differentiate themselves with their premium rates.

Emirates National Oil has offered $2.37 per barrel as the premium price for gas oil and $3.54 for jet fuel.

Unipec has offered $2.57 per barrel as the premium price for gas oil and $3.06 for jet fuel.

Earlier under the state-to-state arrangement, the premium price for gas oil was $4.4 per barrel and for jet fuel $5.4 per barrel.

In December last year, the purchase committee decided that 50 percent of the annual import of petroleum products by BPC will be on the government-to-government basis and the other 50 percent through open tender.

On the basis of the decision, the purchase committee last month approved the premium cost of importing about 15 lakh tonnes of various petroleum products from 14 countries under the government-to-government arrangement.

The energy ministry officials said the cabinet committee has warned the BPC that in future if the premium rate under government-to-government arrangement is not close to that of open tender, the import will not get approval.

The BPC imports around 50 lakh tonnes of petroleum products annually at a cost Tk 50,000 crore to Tk 60,000 crore.