Bangladesh to draw up plans to buy Russian oil

Bangladesh currently buys fuel from Middle Eastern countries including Saudi Arabia and the UAE, and from companies in those countries.


August 17, 2022

DHAKA – Prime Minister Sheikh Hasina yesterday instructed the authorities concerned to prepare a plan for buying fuel from Russia.

During a meeting of the Executive Committee of the National Economic Council (Ecnec), she asked why Bangladesh could not buy fuel from Russia when India could, said Planning Minister MA Mannan, who attended the meeting.

The government on August 6 hiked prices of fuel, including diesel which is widely used in industrial, transport and agriculture sectors. Diesel price was raised by 42.5 percent to Tk 114 per litre from Tk 80. Prices of many essential products have been rising since.

Bangladesh currently buys fuel, under long-term government-to-government agreements, from Middle Eastern countries including Saudi Arabia and the UAE, and from companies in those countries.

In late May, Russia, facing sanctions after its invasion of Ukraine on February 24, made an offer to sell crude oil to Bangladesh.

The offer was then declined partly because, according to energy ministry officials, Russian crude oil is heavier than that imported from Arab countries, and the country’s lone state-run refinery is designed to process the lighter crude oil.

Following yesterday’s meeting it was not revealed whether the government was considering importing refined or crude oil from Russia, the world’s third-largest oil producer.

Foreign experts will visit the refinery in Bangladesh to see whether the capacity can be built to refine Russian crude, Foreign Secretary Masud Bin Momen said at a separate event yesterday.

After the Ecnec meeting, MA Mannan quoted the PM as saying, “Due to the Russia-Ukraine war, people are suffering because of the increase in global fuel prices. This is becoming a problem. India and other countries are buying oil from Russia — so we have to see if we can buy.”

After Russia’s invasion of Ukraine, the European Union, the UK and the US imposed sanctions on Russian products, including fuel. But India’s oil import from Russia surged to record levels amid the sanctions due to a hefty discount, according to a Reuters report.

“We need to talk to Russia and make a plan,” the planning minister told reporters.

He said that at this stage it is just a policy decision. “It doesn’t mean we will buy fuel from Russia tomorrow; we must explore how we can do it. Russia says they will go for currency swap.”

Replying to a question, the planning minister said the government would adjust fuel prices again if prices in the international market decreases.

“Now the [international] price is declining, but we are getting those products that were bought at least two months earlier at a higher price. We need some time, a minimum of two months,” he added.

He said, “The prime minister said [the issue of] fuel is getting high priority.”

During a briefing at the foreign ministry, Masud Bin Momen said they were trying to find alternatives amid the current crisis.

“We earlier knew that we have no capacity to refine Russian crude … We need to build the capacity first; foreign experts will arrive soon to visit the refinery.”

He said, “We will explore alternatives [other than Russia]. We have good relations with all the middle eastern countries, and those will be our first priority.”

Asked about potential risks of buying from Russia as Bangladesh has strong economic ties with the countries imposing the sanctions, he said, “Other countries are importing. If we find it to be risky, we will go for other options.”

scroll to top