UPDATE 1-Bangladesh fixes fuel import contracts
DHAKA Dec 24 (Reuters) - Bangladesh Petroleum Corporation (BPC) has concluded first half 2013 term negotiations for refined oil products at mostly stronger premiums than current contracts, a senior BPC official said on Monday.
BPC will also buy 700,000 tonnes of Murban crude from Abu Dhabi National oil Company and another 700,000 tonnes of Arab Light crude from Saudi Aramco in 2013 for its refinery.
The BPC finalised its gasoil term contract at a premium of $4.30 a barrel to Middle East quotes, up from the $3.80 a barrel premium for its July to December term cargoes this year. For large vessels, the premium has been set at $3.62, up from $3.42 a barrel.
The term contract for jet fuel and kerosene has been fixed at a premium of $5.30 a barrel, up from $4.80 a barrel.
The premium for fuel oil for first half of 2013 will remain unchanged from $39.50 a tonne to Singapore spot quotes for October-December term cargoes.
BPC, the country's sole oil importer and distributor, will import around 2.60 million tonnes of gasoil, 700,000 tonnes of fuel oil, 510,000 tonnes of jet oil, 60,000 tonnes of 95-gasoline octane and 20,000 tonnes of kerosene in the next year.
Kuwait Petroleum Corporation (KPC) will supply around 1.02 million tonnes of gasoil in 2013 and 210,000 tonnes of jet fuel.
Malaysia's Petronas will supply 460,000 tonnes of gasoil, 240,000 tonnes of fuel oil, 120,000 tonnes of jet fuel and 20,000 tonnes of kerosene.
Around 180,000 tonnes each of gasoil and fuel oil will be sourced from Emirates National Oil Company (ENOC) and 500,000 tonnes of gasoil and 20,000 tonnes of fuel oil from Egypt's Middle East Oil Refinery.
Philippines National Oil Company (PNOC) will supply 214,000 tonnes of gasoil and 60,000 tonnes of 95-octane gasoline and PetroChina will supply 120,000 tonnes of gasoil and 40,000 tonnes of fuel oil in the next year.
Vietnam's Petrolimex will sell 220,000 tonnes of fuel oil and 60,000 tonnes of gasoil and Indonesia's Bumi Siak Pusako 40,000 tonnes of fuel oil to the BPC.
Domestic demand for fuel oil has been swelling as a shortfall of natural gas supply forced the country to turn to costly oil-fired quick rental power plants. The chronic electricity shortage has limited economic growth and investments in Bangladesh and often stirs public fury.
Until early 2010, Bangladesh was an occasional seller in the Asian fuel oil market, offering small volumes of about 30,000 tonnes irregularly.
The government heavily subsidises BPC, which sells fuel oil to the local market at much lower rates than import prices.
In December 2011 Bangladesh last raised oil prices for the four time since May last year and has been under pressure from the global lending agencies such as the International Monetary Policy to hike again to trim the country's subsidy burden but the government is responding slowly as election is due late 2013. (Reporting by Ruma Paul)