The New Nation - Internet Edition

Mashiur Rahaman

State-owned Indian Oil Companies (IOC) has cancelled petroleum exports to Bangladesh, which was settled under an agreement signed with Bangladesh Petroleum Corporation (BPC). The decision came after the Government of India increased cost of per ton exportable rice from $320 to $1000.

The Indian state company has justified its stand, saying the company doesn't have adequate stock. Currently, Bangladesh imports total 120,000 tons of fuel from India.

Confirming the news, BPC officials have informed that Bangladesh has signed a contract with IOC in January 2008 to import at least 120,000 tons of fuel. Under the contract, the first shipment of 10,000 tons of diesel was scheduled to arrive at the end of March or early April 2008 through river route. But, by this stand, Indian petroleum supply became uncertain, said the official.

"This cut-off of Indian petroleum supply could have negative impact over our local petroleum reserve," said an energy expert.

Though this action is not likely to have immediate impact over Bangladeshi oil market, it might affect our national petroleum reserves.

According to the oil import statistics of BPC, import of Indian oil is financially beneficial for Bangladesh as its transportation cost is considerably lower than the imports from Middle East and Europe.

It may be mentioned that the IOC sent a letter recently to the BPC office, stating that it would not be possible on its part to export fuel to Bangladesh for the time being as it itself is importing oil to meet domestic demand.