DHAKA: Bangladesh Petroleum Corp (BPC) has issued its first tender to buy oil products in 15 years, in a move away from direct term deals with suppliers as it opens up its purchasing contracts.
The decision to buy fuel products via a tender this year comes at a time when gasoil and jet fuel supplies are ample in Asia as refiners take advantage of cheap crude oil to maximise run rates even though demand growth has failed to catch up.
BPC is seeking 9.847 million barrels of 500ppm sulphur gasoil and 1.44 million barrels of jet fuel, a tender document showed. The delivery of the cargoes will be done in phases throughout this year, a BPC official said. The tender closes on Feb. 22 and is valid for 60 days. BPC is procuring the oil products on behalf of the Ministry of Power, Energy and Mineral Resources, according to the document.
BPC was initially expected to float the tender late last year. The reason for the delay was not immediately known. BPC’s chairman A. M. Badrudduja has said that the company will import about 20 percent of its total crude and oil products for 2016 through tenders.
BPC has a term contract with 14 companies for refined oil product imports for the first half of 2016, including the delivery of 2.46 million tonnes, or about 18.3 million barrels of gasoil, and 320,000 tonnes, or about 2.56 million barrels, of jet fuel. “BPC’s tender should take out some of the surplus cargoes in Asia, but I think it’s still not sufficient to move the market much,” a Singapore-based trader said.
“These barrels were (previously) supplied by term holders, and now they have reduced their term and are seeking barrels through a tender, so in principle the total consumption is the same, not additional,” the trader said.
