Octane stock on the rise, but sufferings intensify due to supply shortage

A shipment of octane arrived in the country at the beginning of this month, with another on the way, and production from domestic sources has also increased, yet the supply of octane in the market has declined compared to last month. It is also lower than in April last year, resulting in longer queues at filling stations and increased public suffering.

The state-owned Bangladesh Petroleum Corporation (BPC) is responsible for importing and supplying fuel oil. It sells fuel through dealers of three marketing companies—Padma, Meghna, and Jamuna.

According to the agency’s data, in March last year, an average of 1,193 tonnes of octane was sold daily.

Compared to last year, average daily sales increased by 26 tonnes this March.

However, in April, sales have decreased by 49 tonnes. Compared to last month, sales this month have dropped by 83 tonnes.

After the war broke out in the Middle East, demand for fuel increased. People started crowding at filling stations, and the crowd has been growing daily.

Petrol pump owners say the queues across the country are mainly for octane and petrol.

Panic over fuel spread as soon as the attack on Iran began on 28 February. In early March, sales of petrol and octane nearly doubled.

To maintain stock, the government then introduced rationing. Although rationing was lifted after a few days, supply in the market is still being maintained in line with last year’s sales.

Two officials at the fuel marketing companies said demand from petrol pumps has increased by 30 per cent, but they are being supplied the same amount as on the same day last year. As a result, some pumps are not receiving fuel every day. If the supply of petrol and octane is increased, congestion at pumps may decrease.

Mizanur Rahman, a member of the Petrol Pump Owners’ Association, told Prothom Alo that in his long experience, he has never seen such a situation. They never imagined there were so many motorcycles in the country. The crowd is mainly for petrol and octane. If the supply of these two increases, the congestion may ease, he said.

Syed Sazzadul Karim, a convener of a faction of the Petrol Pump Owners’ Association, told Prothom Alo that running filling stations is becoming difficult, and employees are quitting their jobs.

BPC held a meeting with filing station owners yesterday, Monday. Prothom Alo spoke to two participants after the meeting. They said that increasing supply to filing stations would reduce the crowd. If allocation limits continue based on last year’s levels, the situation will worsen.

Therefore, if necessary, petrol and octane prices should be increased to boost supply.

The BPC chairman assured business representatives that he would discuss the matter with the Energy Division.

Minister for Power, Energy and Mineral Resources Iqbal Hasan Mahmud told Prothom Alo that there is no shortage in fuel stock. Stock is being increased further, so supply should not decline, and the matter will be reviewed.

Unless panic buying decreases, public suffering will not ease, he added.

Octane was once available from the government refinery, but it is no longer supplied from there. However, BPC regularly purchases octane from four private refineries in the country. These refineries produce fuel oil by refining condensate—obtained as a byproduct of gas from various gas fields and from imports.

The four refineries are Super Petrochemical Limited in Chattogram, Partex Petro Limited, Aqua Refinery Limited in Narsingdi, and Petromax Refinery Limited in Bagerhat.

In addition, BPC also receives octane from the fractionation plants of state-owned gas companies.

From March to June last year, an average of 1,217 tonnes of octane was sold daily from the depots of the three oil companies.

Although supply increased in March this year, it decreased in April. On 11 April, 1,144 tonnes of octane were sold in the country. The next day, 12 April, it increased to 1,173 tonnes. So far in April, the average daily sales stand at 1,136 tonnes. Due to reduced supply in the market, stakeholders see no possibility of a decrease in queues at filling stations.

No octane was imported last month. According to the Energy Division data, after the war broke out on 28 February, a vessel carrying 26,000 tonnes of octane arrived in Chittagong Port on 9 April. Supply from government and private production centres has been increasing daily this month.

After sales on 12 April, the country has 20,118 tonnes of octane in stock, equivalent to 17 days’ supply. Another vessel carrying 30,000 tonnes of octane is expected to arrive on 17 April.

Two BPC officials said octane is generally used as fuel in motorcycles, private cars, and microbuses. Octane accounts for 6 per cent of total fuel supplied annually.

Fuel marketing companies are under pressure from the Energy Division. The Energy Division is controlling additional demand by reducing supply in some cases. However, there is no shortage of octane, and more can be imported if needed. Therefore, the government can increase supply if it chooses.

According to BPC data, 415,000 tonnes of octane were sold in the country in the last fiscal year. Of this, 50 per cent was produced domestically and the remaining 50 per cent was imported. Demand for octane in April is 37,000 tonnes. This month, 56,000 tonnes are expected to come from imports and 30,000 tonnes from domestic sources. Based on this, there is no risk of a shortage.

Petrol is mainly used in motorcycles. In March this year, average daily petrol sales were 1,285 tonnes, compared to 1,496 tonnes last year. That means supply has decreased by 14 per cent, or 211 tonnes per day.

In April last year, average daily petrol sales were 1,374 tonnes, while this year it has decreased by 7 per cent to 1,271 tonnes. Currently, there is a 12-day stock of petrol.

Since petrol is fully produced domestically, there is no risk of supply shortage this month at least.

Energy expert M Tamim told Prothom Alo that demand is higher than normal at present, so there is no scope to reduce supply—it must be increased.

Even if it was not done last year, fuel should now be supplied to all pumps in Dhaka, he said adding this would reduce congestion at specific pumps. At the same time, the actual demand of those purchasing fuel can be assessed, M Tamim suggested.