Wednesday, 1 November 2017

Bangladesh signs long-term gasoil import deal with India.

Bangladesh India GasOil import deal

After solving the historic India – Bangladesh border conclave deal, ties and trade between India and Bangladesh are improving at rapid pace. Bangladesh is one of the largest importer of India’s high-quality goods and services. Recently, Bangladesh signed a gasoil long term import deal with India in energy space. Bangladesh signed a long-term sales and purchase agreement with an Indian refiner to import gasoil to meet the country's energy demand, officials said.

The deal between Bangladesh Petroleum Corp (BPC) and Numaligarh Refinery Limited (NRL) was signed in presence of India's External Affairs Minister Sushma Swaraj, who arrived in Dhaka on Sunday on a two-day visit to discuss bilateral issues. Her visit comes as Bangladesh is struggling to cope with an influx of almost 600,000 Rohingya Muslim refugees.

Gasoil will be imported from Numaligah Refinery in India’s Assam state via pipeline. The cost of the pipeline construction will be borne by India. It can be noted that only 5 kilometres of pipeline runs in Indian territory while the rest is situated in Bangladesh. Department of Energy and Mineral Resources and Bangladesh Petroleum Corporation sources has said that, Bangladesh is likely to import 2.5 lac metric tons to 4 lac metric tons of diesel from India using this pipeline.

The pipeline will connect to Bangladesh Petroleum Corporation’s Parbatipur fuel depot in Dinajpur, North Bangladesh. Bangladesh traditionally receives most of the fuel requirement at Chittagong port near the Bay of Bengal. Bangladesh spends USD 6.6 per barrel in logistics to supply fuel from Chittagong Port to North Bangladesh. NRL under Bharat Petroleum has agreed to supply fuel at USD 5.5 premium rate on import rate. Bangladesh Petroleum Corporation will import around 250,000 million tonnes/year of gasoil in the initial three years, and the volume will be raised to around 300,000 mt/year during the fourth to sixth years, 350,000 mt/year during the seventh to 10th years and 400,000 mt/year from the 11th to 15th years. The Indo-Bangla friendship gasoil pipeline is expected to be completed in three years.

With growing cooperation in trade and development, India’s exports to Bangladesh reported a robust growth in 2016-17. The growth is attributed to a significant rise in export of equipment and high-value machinery for project implementation in Bangladesh. According to the Commerce Ministry, exports to Bangladesh touched $6.8 billion in the fiscal year ending March 2017, recording 13 per cent growth. Total bilateral trade had hit an all-time high of $7.5 billion, up 11 per cent. Bangladesh is the ninth largest importer of Indian goods.

As a part of its Act East Policy, India is keen on developing new railway lines, highways and upgrading port infrastructure. In order to reach its North-eastern states faster, development of transportation in Bangladesh is must.

- Chaitanya Kulkarni

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