EB REPORT  

-Private cos participation in import, marketing of petroleum products envisaged

Private companies are set to be allowed to import and market petroleum products under  government policy shift towards partial opening of the fuel market amid a nagging crisis.

Sources say the government is looking to expand private participation in fuel import and sale, alongside the state-owned Bangladesh Petroleum Corporation (BPC), to ensure smooth supply of petroleum products on the domestic market even in crisis period.

The state-run corporation has already been bestowed with the responsibility to prepare a policy to ensure that the private sector can import petroleum products and then distribute and retail the fuels.

“I think a policy should be there to allow private sector in petroleum business on a limited scale not above 30 per cent,” a senior official of energy and mineral resources division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR) told.

Country’s overall fuel-storage capacity will increase significantly and the private sector’s infrastructure along with their investments could be utilised to the optimum once the policy is adopted, he said.

Currently, BPC imports the lion’s share of petroleum products, both crude and refined, like diesel, furnace  oil, jet fuel, and octane.

Several privately owned companies-like Super Petrochemical Pls, Petromax Refinery Plc and Acqua Refinery Ltd - use both local and imported condensate and naphtha to produce diesel, petrol and octane.

The privately owned refineries, however, doesn’t have the authority to sell petroleum products directly at retail level.

These private petrochemical companies sell their petroleum outputs to the state-run petroleum corporation, BPC.

Privately owned furnace-oil-fired power plants also import furnace oil independently to generate electricity in their power plants.

Under the existing system, the BPC has the monopoly to distribute and market refined petroleum products to different petrol pumps or other retail sales points.

The BPC’s long-lasting monopoly on petroleum sector has long been encouraging oil theft, pilferage and, to some extent, its contamination by a section of unscrupulous employees, it has been alleged.

Once private sector enters, the BPC monopoly will be broken, the critics said, adding that the national energy security will be ensured and strong fuel supply system will be established backed by a transparent and competitive environment.

Instead of the BPC, the country’s energy regulator - Bangladesh Energy Regulatory Commission (BERC)–should be given the responsibility to fix prices of petroleum products under automated fuel-pricing mechanism, market insiders said.

Currently, liquefied petroleum gas (LPG) sector is dominated by private sector as around 98 per cent of market requirement, or around 1.70 million tonnes of LPG, is imported by them annually.

A huge segment of the country’s population is getting both the cooking fuel and auto-fuel without  government’s involvement either fiscally or through infrastructure, they added.

Contacted, energy-expert Professor M Tamim opined that the government could open up the petroleum sector.

“But there should be strong monitoring to ensure that the commoners get benefit out of the market liberalisation.”

The government can follow the policy of neighbouring India where both public and private sectors are engaged in petroleum import, distribution and retailing, said Mr Tamim, who is currently Vice- chancellor of Independent University, Bangladesh (IUB).

Sources have said Bangladesh currently imports around 7.5 million tonnes of petroleum products, both crude and refined oils combined.Take Economics Courses

Of the imported petroleum, 5.0 million tonnes are diesel, 1.5 million tonnes crude oil and the remainder is furnace oil, jet fuel and octane combined.

At least three interested companies including Bashundhora have already shown interest to join hands with government in the petroleum sector, said the energy ministry officials.