China’s Unipec and Vitol have won a tender to supply oil products to Bangladesh after submitting the most competitive prices.

State-owned Bangladesh Petroleum Corp (BPC) issued a tender in October seeking to import 965,000 tonnes of gasoil with a maximum 0.05 percent sulphur content, 90,000 tonnes of jet fuel and 120,000 tonnes of high-sulphur fuel oil.

“Unipec and Vitol won the tender as they came up with the most competitive offers,” BPC director Mozammel Haq told Reuters.

He said Unipec would supply all of the gasoil and jet fuel and Vitol the fuel oil in the first half of the next year.

Unipec, a wholly-owned subsidiary of China Petroleum & Chemical Corp, quoted the lowest offers to sell gasoil at $2.16 and $2.08 a barrel and jet fuel at $2.76 a barrel. Those prices were premiums over Middle East quotes.

Vitol, the world’s largest oil trading house, offered to supply fuel oil by submitting the lowest offer of a premium of $15.80 a tonne to Singapore spot quotes.

BPC started issuing tenders for its long-term contracts in February after a 15 year hiatus, during which it directly negotiated with suppliers of fuel products. It wants to move away from direct deals as part of efforts to buy at cheaper rates through the international tenders.

It has finalised term contracts with 10 companies for refined oil product imports in the first half of 2017, mostly at higher premiums than the tender.

The premium for gasoil for the January to June period under the term contracts will be $2.30 a barrel and for jet fuel $3 per barrel over Middle East quotes. The premium for fuel oil is the same level that Vitol offered into the tender.

A shortfall in supplies of natural gas has forced the South Asian country to burn oil, a costlier option, to generate electricity.

BPC plans to buy 1.6 million tonnes of gasoil, 200,000 tonnes jet fuel and 200,000 tonnes fuel oil through term arrangements in the next year, the company officials said.

BPC plans to lower the sulphur content of its gasoil imports from January 2017, in line with a global trend towards cleaner fuel.

Source: Reuters (Reporting by Ruma Paul; editing by David Clarke)