Bashundhara wants to sell petroleum by-products in open market   

Bashundhara Bitumen Plant wants to sell furnace oil and naphtha – two by-products of the first private sector bitumen plant in the country – in the open market.

To this end, the company applied for permission to the Bangladesh Petroleum Corporation (BPC) and the Energy and Mineral Resources Division in March this year.

But, the energy division says only BPC is authorised to import and distribute fuel oil locally.

"As per the contract, no company other than BPC may sell fuel oil in the open market. If any company produces petroleum products, they must ask the BPC to buy the by-products, as other condensate fractionation plants do," said Md Anisur Rahman, senior secretary at the Energy and Mineral Resources Division.

"If the BPC refuses to buy the product, then only can they retail it to other consumers."  

Bashundhara Group set up the first ever private sector bitumen plant in Pangaon of Keraniganj on the outskirts of the capital.

Bitumen is a black, viscous and binding organic material, a by-product of refining crude oil. It is also found in nature and is widely used in road construction because it is easy to produce, reusable, non-toxic, and has a strong binder.

From the base raw material of crude oil, the plant produces around 56% bitumen, 30% diesel, 9% furnace oil, and 2.5% naphtha.

Bashundhara's plant has capacity to produce around nine lakh tons of bitumen annually. While the country's annual demand is currently only around five lakh tons, demand is growing at an average rate of 10-15% every year.

That means, if the plant processes one lakh tons of crude oil, it can supply 56,000 tons of bitumen, 30,000 tons of diesel, and 9,000 tons of furnace oil.

As per the contract, BPC takes the plant's diesel oil output and distributes it through three marketing companies.

But BPC is reluctant to buy furnace oil and naphtha due to poor demand at home.

A source at BPC said it imports a limited amount of furnace oil to meet demand for publicly owned power plants that use furnace oil as fuel. Furnace oil fired power plants import their fuel independently and on their own, with BPC's approval.

As such, BPC is not interested in buying furnace oil from Bashundhara Bitumen Plant, and Bashundhara has asked for government approval to retail their furnace oil and naphtha in the open market.

A source at Bashundhara Bitumen Plant said it has processed around 70,000 tons of bitumen since the plant went into commercial operation in February this year.

Apart from diesel, the other by-products are still stocked.

The Business Standard's correspondent could not reach Bashundhara Bitumen Plant officials for comment in this regard.

Before the Bashundhara plant was established, the government imported around 90% of the country's annual demand for bitumen, where only 10% of the demand was fulfilled by Eastern Refinery Limited, a BPC subsidiary.