Oil Minister Pradhan to visit Bangladesh to sign pact for diesel exports through pipelines

New Delhi: India will soon sign a long-term agreement with Bangladesh for exporting diesel through pipelines. Sources told Millennium Post that Dhaka has agreed to New Delhi's proposal for the 'India-Bangladesh goodwill friendship pipeline', which was first proposed by Prime Minister Narendra Modi during Bangladesh Premier Sk Hasina's visit to India. Union Petroleum Minister Dharmendra Pradhan will soon visit Dhaka to sign the agreement, in a move that is seen as Prime Minister Modi's initiative to take the bilateral relationship to new heights.

The agreement is valid for 15 years with a proposition to enhance the quantity of diesel in the coming years, as Bangladesh's energy demand rises. Hasina has undertaken massive industrial production to lift her country to middle income nation level and India's supply of diesel will act as a catalyst for that purpose. The diesel will be supplied from the Numaligarh refinery, a joint venture of Bharat Petroleum, Oil India and the Assam Government. The 130-Km pipeline is being laid from Numaligarh to Parbatipur of Dinajpur district, Bangladesh.

Initially, India proposed to supply 10 lakh tonnes of diesel annually but later it was agreed that at the outset, India would supply 2 lakh to 4 lakh tones a year, which might be increased as and when demand increases. It has also been decided that the price of the diesel exported would be fixed at the International rate. At present, India will supply diesel at $5 per barrel.

Bangladesh now imports diesel from West Asia at a price of $2.2 per barrel. However, it reaches the Chittagong port from where it costs another $4.5 per barrel to transport this diesel to north Bengal. So, ultimately, it costs Bangladesh $6.7 per barrel, which is higher than the price India offers. By importing oil from India, Bangladesh can save huge foreign exchange. Bangladesh imports an average of more than 30 lakh tonnes of diesel from different foreign companies.

Meanwhile, a feasibility study for laying the 'India-Bangladesh friendship pipeline'has been completed and an MoU has been signed for the project. Out of 130 km, only 5 km of the pipeline will be constructed within Indian territory and the rest of it would be within Bangladesh. Both the Indian and Bangladesh governments approved the project last month.