DHAKA: Malaysia's state oil firm Petronas has offered a credit facility to supply oil products to Bangladesh for six months, the second such facility for the nation after a similar offer from the Philippines, chairman of the Bangladesh Petroleum Corp (BPC)said.
The first month will be interest free while the rest of the months will be at a 5.05 percent rate, the same as was offered by the Philippines National Oil Company (PNOC).
"And the credit facility can be extended by another six months with Petronas at the same rate," BPC Chairman Muqtadir Ali told Reuters on Monday, adding that the proposal would be placed to the authority for approval.
The government heavily subsidizes the BPC, the country's sole oil importer and distributor, which sells fuel oils to local market at much lower rates than import prices.
Bangladesh gets loans from the Jeddah Islamic Development Bank, for which it pays a 5.30 percent interest, for oil imports from OIC member countries.
In the second half of this year, Petronas will supply the South Asian country with 395,000 tonnes of diesel at a premium of $3.30 a barrel, 50,000 tonnes of kerosene and 60,000 tonnes of jet fuel both at premium of $4.30 a barrel and 5,000 tonnes of gasoline-95 octane (unlead) at a premium of $7.05 a barrel, with all of the above priced to Middle East spot quotes.
It will also supply 140,000 tonnes of fuel oil at a premium of $32.00 a tonne to Singapore spot quotes, the same premium BPC is paying to other companies for the petroleum product.
BPC bought about 230,000 tonnes of fuel oil in the first-half of the year and has an expected requirement of up to 700,000 tonnes for the second-half, officials said.
Bangladesh's oil import bill is likely to more than double to $6 billion in the year to June 2012 from the previous year, on bulk buying of fuels for power plants burning diesel or fuel oil, even though these are costly, as domestic natural gas supply has failed to keep pace with demand.
A team from Sinopec Hong Kong Limited, a subsidiary of the China Petroleum & Chemical Corporation , is coming to Dhaka to discuss operational details in the firm's first move to join the growing list of national oil companies supplying fuel to Bangladesh.
Apart from Petronas and PNOC, Bangladesh is buying fuels from a number of national oil companies including Emirates National oil Company, Kuwait Petroleum Corp, PetroChina, Egypt's Middle East Oil Refinery, Maldives National Oil Company and Vietnam's Petrolimex.
Copyright Reuters, 2011
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