The construction of the 130km Indo-Bangla fuel oil pipeline has hanged in the balance due to seeking illogical premium by the Indian counterpart to export diesel to Dhaka.
Indian state-owned Numaligarh Refinery Limited (NRL) has now sought premium of $21.19 a barrel in against of $4.5 per barrel that was settled during the latest negotiation with Bangladesh Petroleum Corporation (BPC), said an official.
He said: “If NRL doesn’t reduce the premium, the project would not be feasible for BPC and it is uncertain.”
The official said the new price demand per barrel could still be feasible if NRL would ask for $5 a barrel as the BPC would not require additional cost to supply the imported fuel to Parbatipur.
Earlier, BPC had signed a Memorandum of Understanding (MoU) to import petroleum fuel from India.
Before reaching to the sign, a high-powered team led by BPC Director (Operations and Planning) Md Mosleh Uddin visited Assam to negotiate the tariff for diesel import.
The Indian state-owned company proposed Dhaka to construct the 125-km of the pipeline in Bangladesh part at a cost of Tk 400 crore.
The company also offered to build a 5-km portion of the pipeline in their side.
According to the MoU, BPC is conducting feasibility study on the pipeline project and it is now in final stage.
BPC and NRL will establish a joint venture company (JVC) to install the pipeline, reads the MoU.
The joint-venture will also prepare the guideline to sign a joint venture agreement (JVA) and sales and purchase agreement (SPA) for the project.
The JVA will be responsible for setting up the pipeline and supervising its maintenance and operations.
To implement the project, the government will have to conduct a land acquisition process with the help of state-owned Gas Transmission Company Ltd (GTCL).
Meanwhile, the BPC has already sent a draft paper on the joint-venture company.
Regarding the pipeline project, BPC insiders said: “The government should take the project carefully considering its economic viability.”