Bangladesh’s new strategy: Consideration of refining Russian crude oil in India, to avoid supply crisis

India refining capacity route: Bangladesh wants to use Russian crude oil supplies via India to meet its domestic energy needs. It is being considered to channel India’s refining capacity to deal with the energy crisis caused by conflict in West Asia. Under this scheme, the government of Bangladesh itself is going to bear the entire expense of oil import, refining and transportation in India. Bangladesh’s Energy Department has also sent a proposal to Minister Iqbal Hasan Mahmood Tuku for a G2G level agreement.

Chittagong Refinery problem

According to media reports, Bangladesh’s only government refinery located in Chittagong is not suitable for Russian crude oil. The crude oil coming from Russia is of heavy grade, and this refinery is built only for oil from the Middle East. Its annual capacity is 1.5 million tonnes, forcing Bangladesh to completely depend on imports of refined fuel.

diesel import from india

During the visit of Bangladesh Foreign Minister to India, there was a deep discussion between the two countries on the issue of increasing diesel imports. The cross-border pipeline from Siliguri to Parvatipur in Dinajpur significantly facilitates diesel imports from Numaligarh Refinery Limited. An important 15-year agreement was also signed between the two neighboring countries for diesel import in the year 2023.

New discussions with Russia

The temporary relaxation in US sanctions on Russia has given Bangladesh a good opportunity to explore new options for indirect imports. Bangladesh is now making a huge proposal to import up to 600,000 tonnes of diesel directly from Russia. Russian Ambassador Alexander Khozin also met Energy Minister Iqbal Hasan Mahmud Tuku and talked about bilateral cooperation in the energy sector.

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Benefits of the new scheme

Using India’s state-of-the-art refineries will provide huge savings to Bangladesh in both refining cost and time. This government-to-government level agreement will prove to be very helpful in getting Bangladesh out of the current supply crisis. With this new and strategic partnership, the diplomatic and trade relations between India and Bangladesh will become even stronger in the future.