Furnace oil demand is outpacing available September supplies as industries and power plants turn to the fuel amid worsening gas shortages and rising generation costs.
Bangladesh is increasing its reliance on furnace oil-fired power plants as a severe gas shortage disrupts electricity generation, with the government planning average daily output of nearly 4,000 megawatts from such plants in September.
To meet the target, the Bangladesh Power Development Board (BPDB) has urgently requested 204,100 tonnes of furnace oil from the Bangladesh Petroleum Corporation (BPC). The fuel has been sought for 53 public and private power plants with a combined generation capacity of 5,538 megawatts.
According to BPC data, a total of 31,902 tonnes of furnace oil was sold during the first five days of September. At the end of September 5, available stocks stood at 14,751 tonnes. Another 100,000 tonnes is expected to be imported during the remainder of the month, while 25,000 tonnes is expected from local sources.
Under the current plan, the total amount of furnace oil available for supply throughout September would therefore be about 171,653 tonnes. BPDB’s requirement alone is 32,447 tonnes higher than that figure, excluding demand from industries and other sectors.
Furnace oil sales have surged as industries purchase additional fuel because of the gas shortage. During the first five days of September, average daily sales stood at 6,380 tonnes, compared with 2,177 tonnes during the same period last year, an increase of nearly threefold.
At a meeting of the Energy and Mineral Resources Division of the Ministry of Power, Energy and Mineral Resources on August 3, Mohammad Mofizur Rahman, managing director of Padma Oil PLC, said BPDB had initially sought 84,000 tonnes of furnace oil. The demand later rose to more than 200,000 tonnes following a decision to increase power generation.
He said it would not be possible to supply such a large quantity of oil at once and that discussions had therefore focused on supplying it in phases.
BPC Chairman Mohammad Manzur Alam said meeting the full demand would be challenging because of infrastructure limitations in importing and unloading the fuel.
The Dolphin-5 and Dolphin-6 jetties can unload a maximum of 100,000 tonnes of furnace oil per month. However, Mohammad Zahurul Islam, a BPDB member responsible for generation, said it would be possible to secure an amount close to BPDB’s requirement if oil from ships currently en route could be received in phases.
BR Powergen Limited (BRPL) has requested the largest allocation, 35,000 tonnes, for its three power plants. BRPL Executive Director Gobinda Chandra Laha said the demand comprises 14,000 tonnes for the Sreepur plant, 13,000 tonnes for Kadda and 8,000 tonnes for Mirsharai.
The Sreepur and Kadda plants each require an average of 800 tonnes of oil a day to operate at full capacity. At Mirsharai, the fuel must be transported by road. Although three contractors are engaged for the work, they can transport a maximum of 500 tonnes a day.
Laha also said the cost of power generation would rise as the price of furnace oil has increased to about 100 taka from 71 taka last year.
According to Power Grid Bangladesh, the country’s electricity demand was 16,619 megawatts on the evening of September 5, while 14,361 megawatts was supplied, leaving a load-shedding shortfall of 2,258 megawatts.
At the end of August, generation was disrupted at 62 of the country’s 137 power plants on August 27, including 20 that were completely shut down. Maximum load shedding that day reached 3,664 megawatts, while 24 power plants faced reduced supplies of fuel oil.
Source: The Prothom Alo
