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UPDATE 1-Bangladesh to buy 1.35 mln T gasoil, 190,000 T jet

Source : REUTERS
Last Updated: Sat, Jun 02, 2012 00:14 hrs

* High global price and demand pile on subsidy pressure

* Fuel oil contracts still pending as premiums high (Adds detail)

By Ruma Paul

DHAKA, June 1 (Reuters) - Bangladesh Petroleum Corporation (BPC) has concluded talks with six suppliers to import up to 1.356 million tonnes of gasoil and 190,000 tonnes of jet fuel in the second half of 2012 at stronger premiums than its current contracts.

"So far, we have completed negotiations with six national oil companies to secure supplies of the oil products for the second half," a senior BPC official said.

Kuwait Petroleum Corp (KPC) will supply 450,000 tonnes of gasoil and 120,000 tonnes of jet fuel for July-December delivery. Malaysia's Petronas will provide 310,000 tonnes of gasoil and 70,000 tonnes of jet fuel.

Another 300,000 tonnes of gasoil will be sourced from Egypt's Middle East Oil Refinery and 90,000 tonnes of gasoil from Emirates National Oil Company (ENOC).

BPC, the country's sole oil importer and distributor, will receive 132,000 tonnes of gasoil from Philippines National Oil Company (PNOC) and 74,000 tonnes of gasoil from PetroChina.

Premiums have picked up in the Middle East ahead of peak summer demand.

The company has finalised its gasoil contract for the second half of the year at a premium of $3.80 per barrel over Middle East quotes, up nearly 10 percent from the $3.50 per barrel premium for its January-June contract, and up 15 percent from the same period last year.

The term contract for jet fuel has been fixed at a premium of $4.80 per barrel over Middle East quotes, up from the current $4.50 per barrel, and from $4.30 per barrel over the same period last year.

Other than gasoil and jet fuel, BPC will buy 64,000 tonnes of 95-octane gasoline, of which 48,000 tonnes will be supplied by PNOC and the remaining 16,000 tonnes by PetroChina, and 40,000 tonnes of kerosene, sourced from Petronas.

For 95-octane gasoline, the BPC will pay a premium of $7.35 per barrel, up from $7.20 percent currently and for kerosene $4.80 a barrel.

Premiums for fuel oil have yet to be finalised partly because suppliers are asking for much higher levels.

BPC has been making huge losses as it sells fuel to local consumers at much lower rate than the price it pays to the foreign suppliers.

Its accumulated loss was nearly $3.0 billion in the fiscal year ended in June 2011, as a shortfall of natural gas forced the country to turn to costly oil-fired power plants to resolve its crippling electricity shortages, BPC officials said.

The heavy imports coupled with high global prices have piled pressure on the country's balance of payments and subsidy bill.

The country will have to spend nearly $6 billion on importing oil in the 2011/12 fiscal year, more than double of what it spent in the previous year, they added. (Editing by Anis Ahmed and Anthony Barker)



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