The BPC has decided to increase its storage capacity as demand and consumption of petroleum products increased this year to run the rental power plants.

The capacity of Baghabari oil storage tank will also be increased to store imported fuel in future as the PDB will need more diesel and furnace oil to produce electricity. 

According to the BPC, it will have to increase its import by more than 40 percent as the government plans to generate 1350 MW of electricity from rental power plants which will use diesel and furnace oil. 

Meanwhile, the prime minister’s energy adviser Towfiq-e-Elahi Chowdhury recently disclosed that in a major policy decision the government is withdrawing import duty on furnace oil to help local industries overcome the on-going energy crisis and resolve their problems on their own, sources said.

Private power plant developers and industry operators who will directly benefit from this will also be allowed to import furnace oil to meet their own requirements with permission from Bangladesh Petroleum Corporation (BPC).

All industries, except ship-breaking industry, will be allowed to import duty-free furnace oil for their needs. This is a major incentive, as the duty is now 37.5 percent.

BPC sources said around four lakh metric tonnes of diesel and furnace oil would be required this year to run the rental power plants. 

The energy ministry sought Expression of Interest Letters from the private sector to install new oil storage tank to store increased amount of petroleum product, official sources said. 

Bangladesh imports around 3.5 million tons of oil every year at a cost between $2.5 and $3.5 billion.