Originally posted in The Daily Star on 01 June 2022
State minister for power says refinery configured for only Middle Eastern oil
Bangladesh would not be buying crude oil from Western-sanctioned Russia as its refinery is configured to process only oil from the Arab countries, said Nasrul Hamid, the state minister for power, energy and mineral resources.
That was why Bangladesh had to regretfully decline, he told reporters at the capital’s Bidyut Bhaban at an event to mark the golden jubilee of the Bangladesh Power Development Board (BPDB). Forum for Energy Reporters Bangladesh and BPDB jointly organised the event.
Russian crude oil is heavier than the Arabian crude oil and the country’s lone state-run refinery — Eastern Refinery –- is designed to process fuel from the Middle East, according to an energy ministry official.
The country is buying oil as usual under long-term government-to-government agreements with Middle Eastern countries including Saudi Arabia and the UAE, Hamid said.
“Although the price of oil in the international market is fluctuating, there is no shortage of oil reserves at our end.”
The electricity tariff may be hiked to a reasonable level, he said.
“You should not expect to get electricity at the same rate as 13 years ago. In that times, people’s income has increased.”
Hamid also touched upon the Federation of Bangladesh Chambers of Commerce and Industry’s advice to shut down the quick rental power plants as those were raising the production cost of electricity.
“If fabric merchants get a say on which power plants we should get electricity from, it is not right. You should not advise us on what to do and what not to do.”
The main challenge for the power sector would be providing uninterrupted power at an affordable cost, Hamid said.
But it is unlikely that would happen in another 5-6 years as it entails huge outlays.
“If we go for ensuring uninterrupted power supply, the entire power distribution and transmission lines will have to go underground. Those are very costly projects,” he said, adding that it would cost Tk 16,000 crore to take the system underground in Purbachal alone.