Furnace oil piles up at refinery
The state-run oil marketing companies have cut down sale of furnace oil and also purchase of the fuel from Eastern Refinery Limited (ERL) since the last week's seizure of a smuggled consignment of the fuel.
Because of the situation, the state-run ERL's storage capacity is under pressure.
Officials say if Padma, Meghna and Jamuna oil companies, and Standard Asiatic Oil Company Ltd (SAOCL) continue to cut purchase of furnace oil, then the ERL's production might exceed its storage capacity by today.
Until Thursday, the ERL had in its tank 33,760 tonnes against its storage capacity for furnace oil of 35,200 tonnes. Its daily production of furnace oil is 1,000 tonnes.
The SAOCL, 50 percent stake of which is owned by Bangladesh Petroleum Corporation (BPC), totally stopped selling furnace oil five days back while the three other companies have cut sale significantly.
The move by the oil distributors prompted the BPC to write to the managing directors of Padma, Meghna and Jamuna, directing them to keep the marketing of furnace oil normal.
The letter has also been seen by The Daily Star.
The ERL, a subsidiary of the BPC, says it cannot stop the production of furnace oil in the face of falling demand, but can cut down daily production by 200-300 tonnes.
If the production of furnace oil is stopped, then ERL's entire production cycle of 15 different petroleum products from crude oil including diesel, petrol, octane and kerosene will be disrupted, officials at the ERL said.
At present, the BPC in its different depots has furnace oil more than its capacity. “The stock increased as the power stations have recently cut down their purchase amount,” said BPC Director (marketing) Nurul Alam.
Another official of the BPC said under the circumstances, the ERL would have to go slow in production, as its storage capacity for furnace oil was almost full.
It could not be known why the SAOCL stopped selling furnace oil, the BPC official said, even though the company does not sell fuel to power plants.
Rab on May 20 seized 11 tank lorries and an oil tanker loaded with 3.40 lakh litres (around 290 tonnes) of furnace oil when it was being hauled for black market. A part of that consignment was released from a Padma Oil depot.
On the day, Padma Oil's local sale of furnace oil was 72 tonnes, Meghna sold 84 tonnes and Jamuna 117 tonnes. The SAOCL completely stopped selling furnace oil the same day.
On Thursday, Padma's sale dropped to 18 tonnes while Jamuna's dropped to 15 tonnes.
The ERL plays a vital role in supplying around 40 percent of the country's current petroleum products' demand and thus maintains stability in the petroleum products' market of the country. It sometimes becomes the only source available in the face of disruption in import.
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