Govt should think twice before importing oil from Russia, says Prof Shamsul Alam

As Bangladesh Petroleum Corporation (BPC) contemplates importing fuel oil from Russia, energy experts ask them to be cautious as the country is under various trade sanctions by major Western nations, including the USA.

BPC argues that prices of Russian oil are much cheaper when experts warn of great stakes in bringing Russian oil to Bangladesh.

“If the government can purchase cheaper fuel, it will be great for the economy but they have to be careful as Russian trade is under American sanction,” said Bangladesh’s prominent energy expert Prof Shamsul Alam.

He urged the energy division to think twice before making any endeavour over oil import.

“Due to some political adversaries, the global economy has become vulnerable. We have to understand the consequences in maintaining business relationships with Russia at this point. The energy division has to have its farsightedness over making any decision,” he told the Business Insider Bangladesh.

When referred to India’s decision to import oil from Russia, he said, India is a large country and it has the capability to handle the sanction. If India can tackle the situation, it will be a great job.

Meanwhile, the government has formed a committee to study the consequences.

“A committee has been formed over importing diesel from Russia and the committee will submit its report this week. Our decision will depend on the committee’s recommendations,” State Minister for Power, Energy and Mineral Resources, Nasrul Hamid, told Business Insider Bangladesh.  

If imported, said he, prices would be much lower. “The committee is working on how we can import oil from Russia. Further decisions depend on their observations.

According to BPC, the price of each barrel of Russian oil is only $57.43. Considering the price of a dollar at Tk 110, Bangladesh’s import cost per litre will be below Tk 40.

Although the officials of BPC confirmed to Business Insider Bangladesh about the Russian standby proposal on oil export, they did not wish to talk about the prices.

According to the Energy Division, the pros and cons of buying oil from Russia are being scrutinised. Besides, the feasibility of exchanging the Russian currency ruble is under examination.

“If the trade deficit is too high, how will that deficit be dealt with? Then you have to buy rubles with US dollars and pay. We have to count losses in paying commission in two stages,” an Energy Division official said.

“We have started paperwork after instructions from the prime minister. Some proposals have been received and are being examined. I do not have that many updates to report right now. We are working and will let you know when there is an update,” Senior Secretary to Energy and Mineral Resources Division Md Mahbub Hossain told Business Insider Bangladesh.

The junior minister said if the oil prices come down in the international market, the local prices will definitely be brought down. Prices have come down a bit but diesel oil is still making losses.