Bangladesh plans to lower sulphur content of gasoil imports

Bangladesh plans to lower the sulphur content of its gasoil imports to 10 parts per million (ppm) from the current 500 ppm from mid-2018, in line with a global shift to cleaner fuels, an official of Bangladesh Petroleum Corp (BPC) said on Tuesday.

Bangladesh imports around 3.5 million tonnes of gasoil a year to meet domestic demand, while the country’s sole Eastern Refinery produces about 350,000 tonnes. State-owned BPC is Bangladesh’s sole importer of gasoil.

“We are working on it. We will hold talks with our suppliers once things get finalised,” the senior official told Reuters, without giving details. He declined to be named because he was not authorised to speak to the media.

Kuwait Petroleum Corp (KPC) is the biggest supplier of gasoil to BPC with around 1 million tonnes a year, but it is unable to supply 10 ppm sulphur gasoil until its refineries are upgraded, traders said.

Other than KPC, suppliers for Bangladesh’s middle distillates contracts include Malaysia’s Petronas, Emirates National Oil Co (ENOC), Indonesia’s Bumi Siak Pusako, Philippines National Oil Co, Vietnam’s Petrolimex, PetroChina and Unipec.

If Bangladesh decides to go ahead with the plan of importing cleaner diesel, its import costs are likely to rise, traders said, though they could not provide estimates as this would depend on the price spread between the two grades next year.

BPC’s contracts for gasoil with 500 ppm sulphur for the July-December period are at a premium of $2.20 per barrel over Middle East quotes, down from $2.30 per barrel for the first half of 2017.