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Monday, July 15, 2024

Russia offers refined oil to Bangladesh

Bangladesh's Prime Minister Sheikh Hasina has instructed the concerned authorities to prepare a plan for buying fuel from Russia.

A Russian state-owned company has offered to sell finished oil to Bangladesh since the South Asian country does not have capacity to refine Moscow’s crude oil.

According to a high official of the Bangladesh Petroleum Corporation (BPC), Rosneft Oil Company Russia gave the proposal last week. The price might be as low as 35-percent-discount rate from international market rate.

There are speculations that Bangladesh may miss the benefit of importing ‘cheap’ Russian oil for now as the country’s contracts with global suppliers of petroleum products stand in the way till the end of this year.

Read more: Pakistan takes initial steps to bring Russian oil

Bangladesh currently buys fuel, under long-term government-to-government agreements, from Middle Eastern countries including Saudi Arabia and the UAE, and from companies in those countries.

According to the existing contracts with the suppliers, the government-owned Bangladesh Petroleum Corporation (BPC) must continue importing oils until December, a senior BPC official informed the media on Thursday.

Meanwhile the process of sourcing Russian fuels is already instructed by government high-ups amid a global crunch. Bangladesh’s Prime Minister in a statement said “Due to the Russia-Ukraine war, people are suffering because of the increase in global fuel prices. This is becoming a problem. India and other countries are buying oil from Russia — so we have to see if we can buy.”

Read more: Pakistani banks refuse to finance Russian oil import

At present, China and India are buying Russian crude oil at 35% lower than international prices. After Russia’s invasion of Ukraine, the European Union, the UK and the US imposed sanctions on Russian products, including fuel. But India’s oil import from Russia surged to record levels amid the sanctions due to a hefty discount, according to a Reuters report.

Moscow had previously offered to sell crude oil to Bangladesh, but this was not taken up due to capacity constraints of Bangladesh’s ageing existing five-decade-old oil refinery.

When asked about the potential risks of buying Russian oil as Bangladesh has strong economic ties with the countries imposing the sanctions, “Other countries are importing. If we find it to be risky, we will go for other options,” Planning minister of Bangladesh told media.