In a high-stakes move to bypass the energy crisis triggered by the Middle East conflict, the Bangladesh government has approved the emergency import of refined diesel and LNG through a direct procurement method. Most notably, the government has secured a deal to import diesel from Kazakhstan at approximately $75 per barrel—a staggering discount compared to the current “Arab Gulf” market rate, which peaked at over $238 on April 1.
Cabinet Committee Greenlights Emergency Imports
The decision was finalized on Saturday (April 4) during a virtual meeting of the Cabinet Committee on Government Purchase (CCGP), presided over by Finance Minister Amir Khasru Mahmud Chowdhury. The Ministry’s Public Relations Officer, Siraj ud-Doula Khan, confirmed the approvals to The Business Standard (TBS).
Key Procurement Approvals:
Kazakhstan Deal: 100,000 tonnes of refined diesel from Kazakh Gas Processing Plant LLP at $75.06 per barrel.
LNG Cargoes: Two cargoes of Liquefied Natural Gas (LNG) from Singapore-based Aramco Trading Singapore Pte Ltd.
The “Arab Gulf” Price Gap
The procurement highlights a massive price disparity caused by the war. While the international benchmark for refined oil in the Arab Gulf was recorded at $238.12 on April 1, Bangladesh is paying just $75.07, effectively insulating the national exchequer from billions in potential losses.
Why the Emergency Shift?
The Energy Division’s summary to the Cabinet paints a grim picture of global logistics:
Force Majeure: Regular suppliers like Unipec Singapore and Petco Trading Labuan have declared Force Majeure, citing their inability to deliver April parcels due to the war.
Strait of Hormuz Closure: Following U.S. and Israeli strikes on Iran, Tehran has blocked the Strait of Hormuz, a chokepoint for 20% of the world’s oil.
European Demand: As LNG exports from Qatar and Oman face disruptions, Europe has pivoted to liquid fuel, driving up global competition and freight rates.
Domestic Impact: Long Queues at Pumps
Despite these emergency deals, the ground reality in Bangladesh remains tense. Dwindling reserves have led to massive queues of private cars and motorcycles at filling stations across the capital and the country. The government hope these new “line-ups” from Kazakhstan and Singapore will stabilize the supply chain before the current stock reaches critical lows.
Proposals Put on Hold
While the Economic Affairs Committee initially cleared the import of an additional 1.5 million tonnes of diesel and petrol from Dubai, Oman, and Kazakhstan, the Purchase Committee has only approved the initial 100,000-tonne lot for now. This includes a 10-lakh tonne diesel proposal from Dubai that remains pending further review.
