The Bangladesh Petroleum Corporation (BPC) has decided to procure one lakh tonnes of octane from the international spot market to meet a growing supply shortage.
The decision was approved at BPC’s 1023rd board meeting on March 23 and sent to the Ministry of Power, Energy and Mineral Resources for final approval.
Dubai-based DBS Trading House, affiliated with FESCO, has offered to supply the octane at a 5% discount on the Platts Arab Gulf benchmark rate.
According to the March 23 Platts rate, the price of octane (Gasoline 95) is $163.71 per barrel, making the total cost for one lakh tonnes (approximately 860,000 barrels) around Tk 1,643 crore, based on the current exchange rate of Tk 122.85 per USD. The first shipment is expected to arrive in April, subject to final approvals.
As of March 24, BPC had 12,500 tonnes of octane in stock. After accounting for 10% deadstock, 11,250 tonnes were available for distribution. Between March 1 and 23, a total of 28,939 tonnes of octane were sold, averaging 1,258 tonnes per day. At this rate, the current stock would last only nine days.
Domestic production from government and private fractionation plants provides around 263,959 tonnes annually, averaging 21,997 tonnes per month or roughly 724 tonnes per day. Even at this rate, reserves would run out within 21 days without additional imports.
A BPC official, requesting anonymity, said the ongoing Middle East conflict has disrupted regular fuel supplies.
“Some scheduled suppliers initially agreed to deliver in April but later invoked force majeure. To meet domestic demand, BPC decided to urgently procure octane from the spot market,” the official said.
The official added that DBS Trading House has also offered 5 lakh tonnes of diesel along with one lakh tonnes of octane at competitive rates, lower than local suppliers.
“The board has approved the proposal. Once the Ministry and relevant procurement committees give final clearance, BPC will proceed with Letters of Credit and other formalities,” he said.
Earlier, BPC approved spot market purchases of 8 lakh tonnes of diesel in the 1021st board meeting before Eid and 1 million tonnes of diesel from DBS Trading House in the 1022nd board meeting on March 22.
Amid global fuel market volatility due to the Iran conflict, Bangladesh is increasingly relying on spot market imports of diesel, LNG, and now octane to secure energy supplies and stabilise prices.
MDIH/MHK