Two vendors reluctant to supply fuel to BPC
Two of the six vendors of the Bangladesh Petroleum Corporation have expressed reservations about providing further fuel cargos, in a development that raises questions of whether the state agency would be able to ensure uninterrupted supply in the coming months.
BPC owes Singapore-based Vitol Asia and China's oil trading giant Unipec about $282 million amid the ongoing dollar crunch.
Earlier in 2020, the two won a tender to supply up to 1.06 million tonnes of oil products in the first half of the year after placing the lowest offers.
Vitol Asia, the Asian unit of the world's largest independent oil trading house, had dues of $152.60 million from BPC.
The company sent emails on August 8 and 10 last year informing that they will not be able to supply fuel to Bangladesh if BPC does not clear the dues and demanded interest on the late payments.
Then on February 28, officials of Vitol Asia met with BPC.
As of this month, BPC was unable to clear the dues, an official of Vitol Asia Bangladesh told The Daily Star asking not to be named.
Similarly, Unipec -- a subsidiary of Chinese Sinopec, the world's largest crude oil refiner by total capacity -- had dues of $129 million.
On February 28, the Beijing-based company wrote to the BPC about its dues.
Then on March 4, a ship loaded with diesel from Unipec arrived at the Chattogram port but the cargo was barred from leaving the vessel until the dues were cleared.
"We couldn't release the fuel due to the financial hold," said an official of BPC on the condition of anonymity to speak candidly on the issue.
On March 5, BPC made a payment of $62.27 million to Unipec and was able to release the cargo from the port.
The following day, BPC wrote to the ministry of power, energy and mineral resources expressing concern that if they are unable to clear the dues, the company may impose such a ban again.
If the fuel cargoes do not arrive as per schedule, the fuel reserves would decline alarmingly.
"There will be uncertainty over supplying uninterrupted fuel. As a result, it would impact the agriculture sector in the ongoing irrigation season," the letter added.
Khalid Ahmed, BPC's director of operations and planning, played down the incidents.
"Such financial hold is nothing new. It's like a strategy of the suppliers to keep BPC under pressure."
Vitol Asia got $30 million yesterday, he told The Daily Star. The rest of the dues will be paid in phases, Ahmed added.
Meanwhile, BPC is yet to open the letters of credit (LC) for six fuel cargos out of the 16 due in March and 14 cargos scheduled for April, according to officials involved with the proceedings.
"It's true that there is a dollar crisis in the banks. So, we are behind in the LC openings. But it's not true that we are not able to open LCs. We are opening those but we are moving slowly," ABM Azad, chairman of BPC, told The Daily Star.
At least two suppliers of diesel, jet fuel, octane, furnace oil and marine oil have expressed reluctance to provide further cargo, according to officials.
Besides Vitol Asia and Unipec, BPC had selected the Emirates National Oil Company, BSP Zapin of Indonesia, PetroChina International and Indian Oil Corporation to import 4.50 lakh metric tonnes of fuel.
BPC imports 65 lakh metric tonnes of various types of fuel a year under different long-term contracts or by issuing tenders.