Bangladesh Moves to Build 90-Day Fuel Oil Reserve; 71 Days by December

The government is working to raise fuel oil storage capacity to cover 90 days of demand, in order to keep industrial production running without disruption and to strengthen energy security.

Dr. Md. Rafiqul Islam, chairman of the Bangladesh Petroleum Corporation (BPC), shared the information on Sunday (November 8).

He said that under the government's plan, the strategic fuel oil reserve capacity will be raised from the current 60 days to 71 days by December this year, and to 90 days by 2027.

Considering the present reality, the government has planned to raise fuel oil reserve capacity to 90 days in phases. Work is under way toward that goal to keep the country's fuel market stable in any unwanted situation, the BPC chairman said.

He said the Energy and Mineral Resources Division and the BPC are implementing various initiatives, including expanding their own storage infrastructure, building new depots, renovating unused tanks, and renting surplus tanks belonging to government and private institutions.

If private and state-owned institutions can build or renovate fuel oil tanks, storage capacity will naturally rise. That will make it easier to deal with a crisis during a possible supply disruption, he said.

According to the BPC, the government plans to rent surplus storage capacity from various institutions. In addition, storage infrastructure with a capacity of 82,200 tonnes at closed power plants will be renovated and brought back into use. The BPC is also considering renting a storage facility with a capacity of 30,000 tonnes from the private company Omera.

The BPC also said projects are under way to build additional depots and tanks on vacant land belonging to Padma Oil, Meghna Petroleum and Jamuna Oil. Among them, two tanks with a capacity of 9,500 tonnes are being built at Padma Oil, three tanks with a capacity of 10,000 tonnes at Meghna Petroleum, and new storage infrastructure with a capacity of 58,500 tonnes at Jamuna Oil.

At present, the country has fuel oil storage capacity for more than 60 days. The government is working to raise that capacity to 71 days by December this year.

According to projections from the Energy Division, total demand for all kinds of fuel oil in the country for 2026 (January-December) has been estimated at 8,426,400 metric tonnes. Of this, demand for diesel is 4,473,000 tonnes, with an average monthly demand of 372,750 tonnes.

Demand for furnace oil is 735,000 tonnes, jet fuel 663,000 tonnes, octane 439,900 tonnes and petrol 488,500 tonnes.

The BPC said the total fuel oil storage capacity of six companies under it, including Padma Oil, Meghna Petroleum and Jamuna Oil, is 1,544,066 tonnes. Of this, infrastructure with a capacity of 67,632 tonnes is under renovation and maintenance.

With the BPC's own capacity, it is currently possible to store diesel for 57 days, octane for 46 days, petrol for 29 days and furnace oil for 78 days. The corporation, however, wants to raise the country's overall strategic fuel oil reserve capacity to 90 days.

Under the National Fuel Policy 1996, there is a provision to keep a 60-day strategic fuel oil reserve in the country. Government institutions including various power plants, Bangladesh Railway and the Bangladesh Road Transport Corporation (BRTC) have the capacity to store 142,298 tonnes of diesel and 178,400 tonnes of furnace oil for their own operations.

Energy experts consider the government's initiative timely.