That Bangladesh, after half a century of its independence, is yet to have a well-equipped refinery to treat imported crude fuel is strangely unusual. Despite the high investment required for setting up a modern plant, the cost differential in importing refined oil vis-à-vis that of crude oil should have weighed heavily in favour of a refining plant much earlier. Although there has been a project, a long lingering one, to install such a plant in the port city of Chottogram, a recent setback has apparently thrown cold water on the prospect that seemed not in the distant horizon.
A news story published this week in this newspaper has attempted to dig into the goings-on of the project and has come up with a picture of sheer negligence for years. It has reported that the state-run Bangladesh Petroleum Corporation (BPC) has sought funds worth around US$2.0 billion from the government to build the proposed high capacity oil refinery in Chattogram. Curiously, the request for fund from BPC came after the exit of French firm Technip from the project. It has been gathered that high cost demanded by the French company and failure of negotiation led to its abandoning the project. This clearly implies that the country will continue to bear the exorbitant cost of importing refined fuel for quite a long time yet.
According to reports, the volume of petroleum oil imports has increased around threefold over the past five decades to meet the growing consumption in transport, industries and commercial outlets with the expansion of the country's overall economy. The BPC data show, during FY2020-21, Bangladesh's import of refined petroleum stood at 4.15 million tonnes for which the state-run agency had to pay Tk 220.39 billion as import bill. Market-insiders are of the opinion that Bangladesh lost the opportunity to purchase Russian crude oil at a lower price due to the absence of a state-of-the-art refinery. Russian crude is available at around US$60 per barrel, far lower than the international price of Brent crude oil, now hovering around US$90 per barrel. It has been learnt that the country's only refinery - Eastern Refinery Ltd - is reportedly not in a position to treat Russian crude due to mismatch of specifications. This apart, what has transpired is that the project stumbling on the unexpected snag is now in a state of uncertainty. It is not clear what the authorities are up to-whether they are preparing for open tender or have already decided to award the contract to a company of their choice.
That the country urgently needs a refinery with state-of-the-art facilities must not be seen as a low national priority. It has been found in an estimate that the proposed plant designed for a yearly capacity of refining 4.5 million tonnes of crude oil would help the country save $220 million a year. Is this not a good enough reason for the relevant authorities to see that the plant is completed under skilled and experienced hands as early as possible?