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Local buyers interested in BPC’s furnace oil


Published : 30 Sep 2021 08:35 PM | Updated : 04 Oct 2021 09:09 PM

Furnace oil one liter price in the international market is Tk 60 and Bangladesh Petroleum Corporation is selling in the country's market is Tk 53.  The upward trend in the price of furnace oil has led power generating companies to increase the demand for furnace oil from BPC several times more than usual to reduce costs.  Because the price set by the government is Tk 7 less than the international market.  But when the price of furnace in the international market is low, then the private power plants import directly for profit.

Bangladesh Petroleum Corporation (BPC) said BPC imports and refines furnace oil according to the demand of the country's power sector.  Earlier this year, Bangladesh Power Development Board issued a demand letter for 1 lakh 53 thousand metric tons of furnace oil.  Later on the 1st of this month, one more tons of demand was given.  Later, Power Development Board (PDB) gave a total demand of 2 lakh 60 thousand tons till December 31.  On the other hand, although the demand of private power plants is 350,000 metric tons, they are importing all of them from abroad. 

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But since the beginning of this year, the prices of all types of fuel oil with furnace oil have been rising in the international market.  And in just a few months, the price of furnace oil has doubled.  At present the price of one liter of imported furnace oil is Tk 60.  And Bangladesh Petroleum Corporation is selling at Tk 63. The upward trend in the price of furnace oil has led power generating companies to increase the demand for furnace oil from BPC several times more than usual to reduce costs.  Because the price set by the government is lower than the international market.  The BCP's loss per liter is about Tk 7.

 BPC's sales of petroleum products show that in the financial year 2014-15, the sales volume of BPC Furnace Oil was 9 lakh 6 thousand 771 metric tons.  Similarly, 7 lakh 11 thousand 889 metric tons were sold in FY 2015-16, 8 lakh 6 thousand 440 MT in FY 2016-17, 9 lakh 25 thousand 150 MT in FY 2017-18, 6 lakh 83 thousand 880 MT in FY 2018-19.  And 3 lakh 64 thousand 241 metric tons for the fiscal year 2019-20.

 According to BCP officials, the private power plants started importing furnace oil from 2014.  As a result, the private power plants from BPC reduced the furnace.  However, even if the IPPs were given the opportunity to import furnace oil, the condition was that 10-12 percent of the furnace oil should be taken from BPC.  But the IPPs did not take furnace oil from BPC due to low fuel prices in the international market.  IPPs started buying furnace oil from BPC this month as fuel prices rose in the international market.  PDB has demanded supply of 2 lakh 49 thousand tons of diesel and 2 lakh 86 thousand tons of furnace oil for IPP in 4 months from the beginning of September to December this year.

According to BPC Finance Department, the price of furnace oil in the international market was 250 250 per tonne a year ago; which is currently 465.  Due to this the price of the furnace has been increased several times.  It is currently being sold at Tk 53 per liter.  Although sold at Tk 53, our loss per liter is Tk 6-7.

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 BPC Deputy General Manager (Distribution and Marketing) MorshedHossain Azad said the PDB demand was 1.5 lakh tons.  And 3 lakh tons is available from our Eastern refinery.  PDB demand can be met with furnace obtained from ERL.  Suddenly the demand for furnace oil in private power plants has increased.  Mainly the rise in international market prices and the gas crisis.  As a result, the demand for furnaces has increased.  This will reduce the stock of furnaces a little, but this month 30 thousand tons of furnaces will come.  80,000 tons will come later.  As a result there will be no problem.

It may be mentioned that at present there are 26 private IPPs (Independent Power Plants) relying on Furnace Oil and 46 power plants in the country including 20 government power plants.  Of this, the demand for furnace oil in government power plants is 15,000 tons per month and in private sector it is 45,000 tons per month.

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