As time is running out regarding import of Russia oil under special USA waiver in a certain period, Bangladesh will have to complete some homework to ease oil crisis, sources said
Bangladesh has started talks with Russia over oil import as the country is going through a catch-22 situation as the major oil producing companies are quoting higher prices of the commodity, sources in Dhaka, Moscow and Washington said.
Sources said Dhaka should convince Brussels over import of Russian oil as the EU countries have put sanctions on Russia on grounds of Ukraine war.
The reactions of the EU countries over import of Russian oil should also be considered by Bangladesh in the new geopolitical conditions, said diplomats and exporters.
Bangladesh-EU trade stands at €22 billion trade in 2024 and out of that Bangladesh exports stand at 20 and EU stands €2 billion.
In the meantime, EU counties are also putting pressure on Bangladesh to reduce the wife trade gap with Bangladesh.
The USA has some major differences with a number of EU countries over a war imposed on Iran.
Sources said that US gave waiver import of Russian oil to some countries until a certain period pushing the price of the commodity.
Until the USA gave the waiver over import of Russian oil, the price of the Russian oil was less than the market in the global market. Sources said as Bangladesh never imported Russian import in the past, Bangladesh will have to ratify amendments regarding payment.
As the US puts sanctions on Russian export, Bangladesh will have special payment system with Russia
Meanwhile, Bangladesh got the USA permission on Saturday to import Russian oil up to a certain period to ease the energy crisis, highly-placed sources said.
The Treasury Department of the USA communicated the positive decision on Bangladesh’s proposal on import of Russian oil Saturday as the six-week war in the middle-east deepens energy crisis, sources in Dhaka, Moscow and Washington said.
Bangladesh has requested the USA to consider the waiver until next three months considering the present situation. However, after completing every step, a minimum one month will be required to bring Russian oil into Bangladesh.
Over the last two weeks, Bangladesh diplomats working in Washington DC have been pursuing the Treasury Department of the USA to make a decision on importing Russian oil very promptly.
Sources said the USA gave some names of the Russian oil companies to be consulted regarding the Russian oil.
The positive USA decision will give a sigh of relief to Bangladesh as the country is going through a deep energy crisis, said an energy ministry official.
Bangladesh Ambassador to Russia Md Nazrul Islam held talks with a high-level stakeholder of a Russian oil company in the meantime and will hold talks with a number of stakeholders of Russian oil companies soon.
However, Bangladesh Petroleum Corporation (BPC) will seek to import the specific variety of Russian oil that the Eastern Refinery of Bangladesh has the capacity to process in Bangladesh. Otherwise, Bangladesh will have to process the oil in the third country, sources said.
Bangladesh Ambassador to Russia Md Nazrul Islam was posted in Qatar before and he has good connections with stakeholders of oil in the global market.
Meanwhile, Foreign Minister Dr Khalilur Rahman in a meeting with US Energy Secretary Chris Wright at the Department of Energy in Washington DC recently has requested the United States to grant Bangladesh a special waiver to import refined diesel and other petroleum products from Russian sources to ease energy pressures.
Finance Minister Amir Khasru Mahmud Chowdhury has said that the ongoing conflict in the Middle East has triggered an abnormal surge in global energy prices, significantly increasing Bangladesh’s subsidy burden. In this context, he said that the government will need to spend approximately Tk 36,000 crore in additional subsidies to import oil and LNG sectors during the March–June period of the current fiscal year.
During the talks, the foreign minister highlighted Bangladesh’s ongoing energy challenges stemming from global supply chain disruptions, particularly ahead of the critical planting season, and stressed the need to ensure uninterrupted fuel supply for farmers and safeguard food security.
US Energy Secretary Wright acknowledged the energy challenges Bangladesh is facing and expressed his country’s commitment to support Bangladesh during these difficult times to help ensure its energy security.
Meanwhile, Bangladesh is working closely with Russia to import petroleum products on government–to –government basis to overcome the energy crisis that deepens amid war, source said.
Bangladesh Ambassador to Russia Md Nazrul Islam, also accredited to Kazakhstan, called on President of Kazakhstan, Kassym-Jomart Tokayev, at the latter’s office and discussed matters of mutual interest.
Md Nazrul Islam also held a meeting with Energy Minister of the Central Asian country Erlan Akkenzhenov and discussed the possibility of energy cooperation .
He is expected to meet Erlan Akkenzhenov again this month to discuss the matter of importing oil through government -to-government level.
Md Nazrul Islam held a meeting with Belarus President Alexander Lukashenko this month and explored the potentials of energy cooperation with the CIS country.
The Bangladesh diplomat will also hold a meeting with Russian stakeholders in the energy sectors on importing Russian oil, said Bangladesh Ambassador to Russia Md Nazrul Islam while talking to this correspondent.
Energy expert Professor Dr Ijaz Hossain said that the government should step in cutting consumption of petroleum products by 20 per cent to cushion the impact of the energy crisis. He said the government can save energy by increasing weekly holidays to three days in a week and improving traffic management. The shorter office hours will not be effective. The energy consumption will hardly come down, if an establishment remains open. The burning of energy on the street same, if weekly holidays are not increased, he said
The Eastern Refinery usually uses crude oil that Saudi Arabia and Kuwait exports to Bangladesh. He said Russia will have to offer special light crude oil to Bangladesh as per specification of the existing refinery.
