Bangladesh Fuel Additional Information

Overview of the Energy Sector in Bangladesh

Bangladesh remained one of the least per capita energy consuming economies in the world, even
after 40 years of its independence. Energy consumption by many South Asian economies, such as
Nepal (340 kg of oil equivalent), is more than what Bangladesh consumes (175 kg of oil equivalent in
2008). The average annual growth of energy consumption in Bangladesh for the period of 1971 to
2008 is found to be a mere 2.17 percent. On the other hand, the demand for energy consumption in
the country has tended to increase at a much faster pace than the supply. Moreover, the recent
emphasis on power generation through rental and quick rental plants has only exacerbated the crisis,
as these are mostly small scale enterprises which have limited capacity to make a dent on energy
gap.

1.
The slow progress in the energy sector continues to take a heavy toll on the economic performance of
the country. The main reason for current energy crisis is the lack of availability of primary energy and
indecision in extracting local energy resources in time. On a positive note, the present government
has taken a number of initiatives to strengthen the capacity of BAPEX for gas exploration and
extraction and also invited some foreign firms to explore energy in some of the off-shore and on-shore
blocks in recent months. If things go smoothly, it can be expected that by the end of 2012 the situation
would improve somewhat; from 2015 the gas shortage is also expected to be reduced. As it happens,
extraction and use of local coal for energy and power generation remains a taboo subject, with no
clear indication as to the thinking of the government. This indication may prove to be costly and may
seriously undermine the long term growth prospects in power and energy sector of the country.

Bangladesh is highly dependent on indigenous natural gas for its primary energy supply as well for
power generation. Approximately 75% of Bangladesh's commercial energy supply is provided by
indigenous natural gas resources and imported oil provides the balance. Natural gas contributes to
over 89% of power generation capacity and approximately 41% of natural gas production is used for
centralized power generation while fertilizer (18%), industry (14%) and commercial/households (12%)
and captive power generation (12%) are the other major consumers of natural gas.

Petroleum refining capacity in the country has remained static for a long time due to limited storage
capacity especially for diesel and jet oil.

Availability of primary fuel for power generation in future is a major challenge. To reduce pressure on
high gas dependency diversification of fuel is necessary (through revision of the  Coal for domestic
coal development).

The average energy use in the economy should be increased by about 11.0 % per year.

The current practice of energy use composition in Bangladesh with its high dependence on imported
liquid fuels, as well as locally produced natural gas make the situation difficult to manage. Such
difficulties arise in part from fiscal limitations that inhibit more intensive exploration of primary energy;
increasing oil price in the international market is also another contributing factor. On the other hand,
generation of energy from renewable sources and achievement of higher energy efficiency in the
economy will also not be very easy.

Recent initiatives taken to revamp power sector and increased dependency on liquid fuels for quick
rental plants have put an extra pressure on the demand for energy in the economy, and thus will
require additional subsidy. Thus, it appears that maintaining a balance between a comfortable energy
supply and a reasonable level of subsidy for the sector will entail a difficult balancing act on the part of
the government.

The Government Initiatives taken in the Energy Sector

A new energy policy is being adopted to tap all indigenous sources of energy to ensure accelerated
economic development and industrialization.

The government has adopted various reform measures to attain energy security by 2021 such as
enhanced exploration and appraisal of oil and natural gas, maximize value addition of natural gas,
tariff rationalization, effective programs for energy efficiency and conservation of commercial energy,
diversifying sources of energy including greater use of coal, LPG and LNG, strengthen institutional
and technological capability of public sector exploration and production companies, encouraging
foreign private finance, joint venture, structured loan etc.

The strategic goals of the government for the sector development are (i) providing adequate and
reliable energy resources to all; (ii) ensuring energy security through diversified and sustainable
sources of energy; (iii) promoting rational and efficient use of energy; (iv) improving sector
management and performance; and (v) mobilizing private sector participation and investments in the
sector. The West Zone Power Distribution Company (WZPDC) was created in 2003 to take over the
power distribution in the western zone of the country.

The Dhaka Power Distribution Company (DPDC) was corporatized in October 2005 to take over
DESA's distribution assets outside the franchise area of DESCO. It is intended to create three more
distribution companies to take over the reaming power distribution operations of BPDB and three
generation companies to take over the generation assets of BPDB. The newly set up companies have
achieved a marked improvement in the performance with respect to reduction of the power losses and
consumer receivables, achieving financial viability and in creating more responsive and accountable
cooperate culture.

Recently the government has taken a series of initiatives to strengthen of local exploration and
production of gas in both on-shore and off-shore blocks, including additional extraction from the
existing fields through work over. Since 2009, daily gas production in the country has been
significantly increased, mainly from gas augmentation by work over and remedial works in major gas
fields. The present government has taken a number of initiatives to reduce the gap in gas supply.
Given the fact that country’s gas use has increased and demand for gas is expected to be intensified
further in the coming years, ensuring the required quantum of gas supply appears to be difficult.
The government, acknowledging the severity of the gas crisis, has taken up an array of medium and
long term plans to overcome the prevailing gas shortage.

There are plans to build permanent LNG terminal to import gas by 2013. Decision has also been
taken to install three compressors at different points to improve supply situation of natural gas. The
government is also actively seeking to strengthen cooperation in the sub-region involving India,
Myanmar and Bangladesh.

Fuel diversity
Power sector envisages an additional generation capacity of about 9,000 MW by 2015. Such level of
generation will require up to 4000 mmcf (Million Cubic Feet)  gases per day. Under the current
scenario, indigenous gas supply will not be able to meet these demands. This implies that
diversification of energy source and modes should be an intrinsic agenda.

Efforts to ensure regional energy security through mutual cooperation and importation should also be
strengthened. At the same time, accelerated adoption of an environment friendly policy to harness
coal resources was made a governmental priority

Governmental Agencies in Charge

The Energy and Mineral Resource Division (EMRD) of the Ministry of Power, Energy and Mines
(MPEMR) is responsible for the overall sector policy formulation, investment decisions and regulation
of natural gas and energy sector. The EMRD is also responsible for developing the coal sector to
diversify the energy supply and improve energy security. The Bangladesh Energy Regulatory
Commission (BERC) was set up in 2004 and its mandate include (i) setting electricity and gas prices;
(ii) setting performance norms to sector entities; (iii) review and approve long term development plans
for the gas and power sectors; and (iv) dispute resolution among sector entities.

Bangladesh Petroleum Corporation is a statutory organization under Petroleum and Mineral

Resources Division, Ministry of Power, Energy and Mineral Resources, Government of People's
Republic of Bangladesh. This corporation was established in the year 1977 for the purposes of import,
refining and processing of crude petroleum, blending of lubricants, export and marketing of petroleum
products including bi-products and lubricants

Bangladesh Petroleum Corporation (BPC) has been established by the Bangladesh Petroleum
Corporation Ordinance 1976   Ordinance No.LXXXVIII (88) of 1976). BPC is governed by The
Bangladesh Petroleum Act, 1974 (Act. No.LXLX of 1974), Bangladesh Petroleum Corporation
Ordinance 1976 and The Bangladesh Petroleum Corporation Rules 1976 (S.R.O. 169-L/77 dated
1.6.77). It has started function on the 1st. January 1977.
Bangladesh Petroleum Corporation.
Title: Director (Operations & Planning)
Name: Mr. Sayed Mohammad Mozammel Haque
Address: BSC Bhaban Saltgola Road Chittagong-4100.
Tel: 031-716348
Fax: 880-31-724910, 720147
Email: bpc@spctnet.com / info@bpc.gov.bd
Website: http://www.bpc.gov.bd/contact.html
Bangladesh Petroleum Corporation (BPC) is a government-owned monopoly in Bangladesh dealing in
importation of crude oil and refined oil, lubricant, refining of crude oil, and distribution and marketing of
fuel oils, lubricants and other petroleum products in the country. It was established by a Presidential
Ordinance in 1976 (# 88, 13 November 1976)  in compliance to the Bangladesh Petroleum Act 1974,
which vests production, processing, refining and marketing of petroleum products in the country
exclusively with the government.

BPC imports up to 29 million barrels of petroleum products a year, including 9 million barrels of crude
oil, to meet the country's demand, mainly from Kuwait, Saudi Arabia, India and United Arab Emirates.

There are 8 companies operating under BPC:

− The oil refinery, Eastern Refinery Limited (ERL);

− The 3 oil distribution and marketing companies:
o Padma Oil Company Limited,
o Jamuna Oil Company Limited
o Meghna Oil Company Limited;
− Two lubricant blending plants:
o Eastern Lubricants Blenders Limited
o Standard Asiatic Oil Company Limited;
− LPG bottling and distribution plant, LP Gas Limited
− A bitumen production company, Asphaltic Bitumen Plant.
BPC with the help of its subsidiary companies has developed storage facilities at different points of
the country for fuel oils to ensure timely supply and market regulation. BPC subsidiaries also use their
marketing agents for product marketing at the local market. The major oil depots are located at
Godnail, (Narayanganj), Daulatpur (Khulna), Fatullah (Narayanganj) and Baghabari (Pabna). Medium-
size depots are at Rangpur, Parbatipur (Dinajpur), Bhairab Bazar, Ashuganj, Srimangal, Dhaka,
Chandpur, Barishal and Jhalokati. Small depots are at Chilahati (Kurigram), Balasi (Gaibandha),
Harian (Rajshahi), Natore, Sylhet, Brahmanbaria. BPC has developed a storage capacity of 206,000
tons at its central establishments and approximately 688,000 tons at the other depots of the country.

Apart from importation, refining and distribution of fuel oils at the local market, the BPC has taken
initiatives in the recent past to improve the quality of the fuel oils as well. BPC has also taken
initiatives from July 1999 to import lead-free gasoline and diesel with reduced sulphur content from
the international market for marketing in the country.

Regarding the fuel stocks, Bangladesh Petroleum Corporation (BPC) has completed development
and expansion of fuel reserve system by modernizing and upgrading the fuel supply system
conforming to international standards for international and domestic flights. Apart from this, BPC is
responsible for development and expansion of fuel reserve system throughout the country. Currently,
its total fuel stock capacity is 8.53 lakh metric tons.

Mr. Mohammad Nurul Amin

Secretary

Telephone # 031-716413
Fax # 880-31-724910, 720147
E-mail:mdnurulmn@yahoo.com
 

Bangladesh Petroleum Corporation.

 

Tel. 880-31-716336-37

Fax # 880-31-720147, 880-31-724910

Functions
The following are the authorities, functions and responsibilities of BPC specified by the law: *
collection and importation of crude petroleum and other refined petroleum products

− Processing of crude petroleum and production of different grades of petroleum products

− Establishment of petroleum refinery and other associated facilities; production of base-stock
− Necessary additives and other chemicals and
− Importation of lubricating oil
− Production of lubricating oil by blending; establishment of plants for recycling of used lubricants
− Establishment of infrastructure and adoption of necessary steps for processing of refinery residue
products
− Planning and implementation of petroleum product storage facilities
− Collection/building of intercontinental oil tankers
− Building necessary facilities and their extensions for marketing of petroleum products
− Act as managing agent for signing of agreements with firms or companies for petroleum importation,
storage, distribution and marketing in the country
− Monitoring, coordination of the subsidiary companies of BPC and any other functions and
responsibilities as directed by the government.
Fuel Supply and Storage 
The oil sub-sector in Bangladesh is negligible in comparison with other Asian countries, with proven
reserves of only 5.69 million barrels and a production of 2,900 barrels per day.

 
Overview
Bangladesh is not a petroleum producing country though it has a refinery plant- EASTERN
REFINERY LIMITED (ERL), where imported crude oils from Saudi Arabia and Abu Dhabi are
processed with a small quantity of oil from Haripur Gas Field and the products are marketed by
several marketing companies. Hence, Bangladesh have to depend on imported oil.

The present annual demand of petroleum products in the country is 3,300,000 tons. Total storage
capacity of petroleum products in the country is 687,500 tons, of which the storage capacity at
Eastern Refinery Limited is 365,000 tons. In the main installations of three oil-marketing companies of
ERL in Chittagong (Padma Oil Company Ltd, Jamuna Oil Company Ltd, Meghna Petroleum Ltd), the
total storage capacity is 205,600 tons.

Other than Chittagong, oil companies have 19 (nineteen) oil depots in different parts of the country,
located at Godenail, Fatullah, Daulatpur, Bhairab, Chandpur, Baghabari, Balashi, Chilmari, Ashuganj,
Rangpur, Dhaka, Barisal, Jhalokati, Sreemangal, Sylhet, Parbatipur, Rajshahi, Natore and Harian
(Rajshahi).

From Chittagong, 82% of petroleum products are transported by river (coastal tanker), 6% by
RAILWAY (Tank wagon or Box wagon), 10% by road (Tank lorry/truck) and 2% by other local means
(boat, push cart or van etc).

There are 72 coastal tankers (850-1200 tons capacity each) for transportation of petroleum products
from Chittagong to Godenail, Fatullah, Daulatpur, Barisal, Jhalokati, Chandpur, Ashuganj and Bhairab
depots. There are 33 shallow Draft Tankers (400-450 tons capacity each) for transportation of
products from Godenail or Fatullah to Baghabari, Chilmari, Balashi and Chandpur depots.

There are about 1,000 railway tank wagons (meter gauge and broad gauge). From Chittagong,
products are despatched to Sylhet, Sreemangal, Rangpur and Dhaka oil depots by rail through meter
gauge railway. From Daulatpur products are despatched to Natore, Parbatipur, Harian and Rajshahi
depots by rail through broad gauge railway.

There are 759 filling stations, 37 consumer pumps, 1,480 agents/distributors, 1273 LPG (LIQUEFIED
PETROLEUM GAS) dealers and 305 Packed Point Dealers appointed by three oil-marketing
companies in the country for retail trading. There are more than 6,000 tank Lorries owned by
dealers/distributors for transportation of petroleum products from oil company depots to their selling
points.

Fuel storage is becoming a major challenge in the country

Fuel transport and storage have emerged as a major concern for the government as soaring demand
in power plants boosts oil import by 50 per cent year-on-year but the country lacks facilities to handle
additional import.

The country will import nearly seven million tonnes of liquid fuel in the current fiscal year, up from 4.8
million last year, as the government plans to generate 1350 MW of electricity from rental power plants
which will use diesel and furnace oil.

To face this problem, BPC has decided to increase its storage capacity.
  

The capacity of Baghabari oil storage tank will also be increased to store imported fuel in future as the
PDB will need more diesel and furnace oil to produce electricity.

Bangladesh Petroleum Corporation (BPC) faces enormous strain on the existing oil handling and
storage facilities.

BPC doesn’t have enough jetties to handle some 7.0 million tonnes of petroleum products to be
imported from overseas.

Lack of new gas supply from local fields and nearly 10 per cent growth in industry and cargo transport
have added to import volume. Dozens of factories set up over the last few years are now dependent
on liquid fuel to generate power.

Yet, there have been no tangible efforts to upgrade the country’s oil handling, internal transport and
storage infrastructure to cope with the increased import.

The government has issued more than 40 licenses to new oil tankers to carry fuel from the seaports to
inland river stations, they noted, adding none of these tankers have been built and no jetties or new
storage facilities have come on board.

The BPC chairman said the state-owned corporation has recently moved to develop infrastructure
facilities to handle additional fuel import.

When contacted, CPA Chairman M Anwarul Islam problems emanating from handling of increased
fuel import would continue in the next two-three years.

As oil tankers carrying fuel for the country may have to wait longer because of lack of dedicated jetties
at the Chittagong Port and limitations of oil storage capacity in the terminal,  delay in berthing will
force the BPC to count extra-charges to oil tankers, raising cost of fuel at a time of high oil prices in
the global market.

To try avoiding these problems, the government may allow private power plant developers and
industry operators to import furnace oil to meet their own requirements with permission from
Bangladesh Petroleum Corporation (BPC).

All industries, except ship-breaking industry, will be allowed to import duty-free furnace oil for their
needs. This is a major incentive, as the duty is now 37.5 percent.

BPC has seven subsidiary companies of which there are

 3 Oil Marketing Companies,

 1 Refinery,

 1 LP Gas Plant

 2 Lube Blending Plants

BPC has seven subsidiary companies of which there are 3 Oil Marketing Companies, 1 Refinery, 1 LP
Gas Plant 2 Lube Blending Plants
Major Distributors 

Eastern Refinery Limited

Address: Uttar Chittagong

Tel:   + 88 031 741343

Fax: + 88 031 740296

Website:

The company is concerned with petroleum refining.

As a subsidiary of Bangladesh Petroleum Corporation (BPC) its business activities are mainly the
processing of imported crude oil and transfer of the products to distribution and marketing subsidiaries
of BPC.

ERL owns and operates a crude distillation unit (34.000 BPSD), catalytic reforming unit (70.000 TPY),
asphaltic Bitumen plant (vacuum distillation unit plus Bitument blowing unit 70.000 TPY of Bitumen),
visbreaking unit (522.000 TPY of RCO processing) and mild hydrocracking unit (57.000 TPY)

Padma Oil Company Limited

Title: Manager Aviation

Name: A.Z.M Ishtiaqur Rahman

Tel: Tel1:   + 88 02 8914458 Tel2:   + 88 02 9141755

Fax: + 88 02 8916347

Website:

Cf chapter Airport Assessment

Jamuna Oil Company Limited

Address: 102, Kazi Nazrul Islam Avenue BSEC Bhaban (1st floor) Dhaka

Tel:   +88 02 9113248

Fax: +88 02 9118619

Website:

Jamuna Oil Company Limited markets and distributes crude oil and petroleum products. The
company is based in Dhaka, Bangladesh. Jamuna Oil Company Limited operates as a subsidiary of
Bangladesh Petroleum Corporation.

Meghna Petroleum Limited

Title: Deputy General Manager (Sales)  & Company Secretary

Name: Sharif Ashrafuzzaman

Address: 58, Agrabad Commercial Area, Chittagong. Phone-031-711891-8, Fax-031-711486. md-

mpl@ctg.net

Tel: 031-711891-8

Fax: 031-711486

Email: md-mpl@ctgtel.net / sharifmpl@ctgtel.net

Website: www.mpl.gov.bd

Meghna Petroleum Limited (MPL) is a subsidiary of Bangladesh Petroleum Corporation (BPC). MPL
was incorporated in Bangladesh on December 27, 1977 as a private limited company under
companies act 1913 (amended in 1994). The Bangladesh Petroleum Corporation (BPC) holds all but
six shares of the Company. The authorized capital of the Company is Tk. 4.000.000.000 divided into
400.000.000 ordinary shares of Tk. 10 each.

The activities of the Company comprise procurement, storage and marketing of petroleum oil and
lubricating products, bitumen and Liquefied Petroleum Gas (LPG) in Bangladesh . As per decision of
the Bangladesh Government and Bangladesh Petroleum Corporation the Company has been
converted into public limited company from 29-05-2007.

Standard Asiatic Oil Company Limited

Address: Airport Road Guptakhal North Patenga Chittagong,  4205 Bangladesh Minhaj Court, 4
Shantinagar, Dhaka-1217, Bangladesh Telephone (88-02) 9358783, 8332686, 8331546 Fax (88-02)
8333 635 Email: cmsl@bangla.net

Tel: 880 31 740920

Fax: 880 31 741749
Email: saocl@bttb.net.bd

Website: www.saocl.com

Standard Asiatic Oil Company Limited is a blender, manufacturer, and supplier of various lubricants in
Bangladesh. It blends railway crankcase oil, industrial grade, automotive grade, hydraulic oil, flashing
oil, turbine oil, spindle oil, and gear oil.

The company also sells liquefied petroleum gas, industrial machine oil, soluble oil, engine oil, and
bitumen products. Standard Asiatic Oil Company Limited serves oil marketing companies. The
company was founded in 1964 and is based in Chittagong, Bangladesh. Standard Asiatic Oil
Company Limited operates as a subsidiary of Bangladesh Petroleum Corporation.

Name of city/town Type of Types of Fuel Capacity

Storage Stored (MT)
Chandpur Depot Octane     -      255 5477

Petrol         -    
633

Kerosene  -    
2367

Diesel        -    
2182

Bhairab Bazar Barge Kerosene   -   3266

1468

Diesel         -  
1798

Bagabari Depot Octane      -     495 41.822

Petrol          -  
2806

Kerosene    -  
4331

Diesel          -
34014
 Lube Oil     -    
176

Balashi Barge Kerosene   -     236

114

Diesel         -    
112

Chilmari Barge Kerosene   -     956

224

Diesel         -    
732

Chatak Barge Kerosene   -       205

79

Diesel         -    
126

Ashuganj Depot Kerosene   -     2737

757

Diesel         -  
1863

JBO            -      
l17

JBO – Jute Basing

Oil

Rangpur Depot Octane      -        33 949

Petrol          -      
31

Kerosene   -    
522

Diesel         -    
 363

Kurmitola (Zia International Airport) Depot Jet A&         -   2899

2899
Barisal Barge Petrol         -     4329
150

Kerosene  -    
1277

Diesel         -  
2902

Jhalukati Depot Petrol         -       3473

300

Octane     -       132

Kerosene    -  
1143

Diesel          -  
1898

Sylhet Depot Octane      -         3800

84

Petrol          -      
484

Kerosene   -    
1.461

Diesel         -    
1.771

Srimangal Depot Octane      -       1.756

108

Petrol          -      
357

Kerosene   -      
 541

Diesel         -      
708

Furnace Oil -      
42

Parbatipur Depot Kerosene    -       2.436

994

Diesel         -    
1.442

Natore Depot Octane      -         954

40

Diesel          -      
456

Kerosene   -        
458

Chittagong – Hazrat Amanat Depot Jet A-1       -       116

International Airport 116
 

Strategic
Storage
At refineries At Other Total strategic
ports storage
(Eastern Refineries
Ltd.)

(A) (B) (C)

Fuel type Units
Aviation fuel Litres (MT) 1.500 -- 25743 27.243
(POCL)
Diesel Litres (MT) 76.550 -- 56330 268.450
(POCL)

66625
 (JOCL)

68945
(MPL)

Gasoline(MS) Litres (MT) 4.500 --   31.090

7034
(POCL)
 

9686
(JOCL)

9870 (MPL)
 

Kerosene Litres (MT) 4.500 -- 21033 81.120

(POCL)

24127
(JOCL)

31460
(MPL)

LPG Tons Not Stored -- --

Heavy oil Tons 204.000 -- -- 204.000
(Crude)