New Delhi, July 26: Bharat Petroleum Corporation Ltd (BPCL) has dropped its plans to export diesel, petrol and kerosene from the Numaligarh refinery to Bangladesh as its trial run for sending across these products through the Brahmaputra waterway has turned out to be a very high-cost affair.
Senior BPCL officials told The Telegraph that since the transport cost involved in exporting petroleum products through the Brahmaputra waterway is so high, it is impossible to compete with the concessional price at which Bangladesh gets its supplies from the Gulf countries.
Bangladesh is a member of the Islamic block and is, therefore, entitled to a discount on its purchases of petro goods. The only way that the Indian oil companies could compete with the landed cost of these goods is by keeping transport costs low.
However, since the Brahmaputra waterway is not sufficiently developed it cannot be used at night. It lacks night navigational facilities that involve an elaborate lighting system along the channel. Since cargo can move only during the day, it takes a very long time to traverse the distance to Bangladesh and this jacks up the boat hiring charges.
Sources in the shipping ministry disclose that while the Inland Waterways Authority did install lights on certain dangerous stretches of the river to make night navigation possible the move came out to be a cropper because of the large-scale thefts of these lights. Since it is difficult to police such a long river the move has failed to make much headway.
Assam can absorb only around 1.5 million tonnes of petroleum products which necessitates the evacuation of over 3 million tonnes of petro goods from the state.
Even within Assam, BPCL is at a disadvantage vis-a-vis Indian Oil Corporation which owns most of the retail outlets in the state. The failure of the Bangladesh foray comes as a setback for the oil major which has made a recent entry into the region with the acquisition of a majority stake in the Numaligarh refinery.
A pipeline to Bangladesh has been ruled out for the present due to the unstable political relations with the country which make such a huge fixed investment a risky proposition. The development of economic ties with India is a highly sensitive matter in Bangladesh. The stiff resistance even to the sale of natural gas to India from which Bangladesh very obviously stands to gain, clearly reflects the complicated nature of the relations between the two countries.