The privately owned petrochemical and refinery plants are all set to resume commercial operation soon, after more than two years of production suspension amid a lack of required condensate supply from the domestic gas plants.
Now, the plants will initially produce diesel - the mostly consumed petroleum product - instead of petrol, as the state-run Bangladesh Petroleum Corporation (BPC) assured of condensate supplies, officials said.
The BPC will import diesel-rich condensate and supply to the private fractionation plants initially for producing diesel, a senior BPC official told the FE Saturday.
The petrochemical and refinery plants would also be able to import diesel to refine and produce diesel.
The country's more than a dozen privately-owned petrochemical and refinery plants remained shut down for more than 29 months since June 2020 allegedly due to a lack of condensate supply as per the BPC's commitment. Before the closure, these were producing petrol from condensate.
The state-run oil corporation recently agreed to import condensate and allow the private plants to produce diesel as the by-product instead of producing petrol and octane.
"We are hopeful to resume commercial operation soon as all necessary works to reinitiate production has already been completed," president of the Petrochemical and Refiners Association of Bangladesh (PRAB) Md Mamun Salam told the FE on Saturday.
It will be a big sigh of relief for the privately-owned plants as they were incurring losses due to non-operation of their business, he said, adding that still they had to continue paying the bank interests.
The government is set to purchase diesel from these plants at international market prices as the energy division under the Ministry of Power, Energy and Mineral Resources (MPEMR) issued a gazette notification recently for introducing an "automated pricing formula" for internal pricing of diesel, octane, petrol, naphtha, condensate and all other crude petroleum products which are usually refined or produced locally. The BPC will fix the prices of the petroleum products under the automated pricing formula following their price movements in the international market on a monthly basis, said sources.
"We are hopeful of producing diesel from our fractionation plants soon," said company secretary of CVO Petrochemical Refinery Ltd., a publicly listed company.
Sources said more than a dozen of such plants were forced to shut operations from July 2020 as the government had stopped supplying necessary raw material - condensate - to maintain their operations.
The state-run Petrobangla and its subsidiary natural gas producing companies had been supplying condensate to the plants when these were in operation.
The PRAB president alleged that the state-run gas entities had stopped supplying condensate 'unilaterally' without prior notice, resulting in closure of their operations.
As a result, bank loans worth around Tk 20 billion borrowed against their plants remained stuck and about 5,000 employees rendered jobless, he added.
The country's annual diesel requirement is around 5.0 million tonnes - the BPC imports most parts as refined products and produces a portion at its wholly-owned subsidiary Eastern Refinery Ltd (ERL).
