IndianOil is currently sourcing LPG for North East from Bangladesh to save lots of transportation cost
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If you are in Tripura, it’s likely that there is a little of Bangladesh in your meal. Because, IndianOil (IOC) is currently sourcing LPG or preparing gas from Bangladesh to save lots of cost of transportation completely from Haldia Slot in West Bengal.
India imports 50 percent of its 25 million tonne LPG requirement. The eastern and northeastern Claims are catered through imports at Haldia. As in December 2018, the subscriber base in the northeast stood at 81 lakh, covering over 80 % of the households.
Since majority Indian users get cooking gas at a subsidized price, lower transportation cost will result lower subsidy per cylinder.
The savings are substantive. IndianOil is importing mass LPG from privately-possessed Omera Petroleum and Beximco Petroleum of Bangladesh, covering a length of hardly 250 km. This is a fraction of the 1640 km road length from Haldia to Agartala via-Siliguri Corridor.
Road activity through Siliguri is particularly costly due to utilization of smaller vehicles beyond Guwahati, to negotiate the hilly terrain.
Trial run
Formally launched simply by Prime Minister’s of India and Bangladesh from Delhi on October 5, 2019; the project became popular on a pilot basis on December 19.
Since then, two road tankers of 18 tonne capacity each, delivering mass LPG to Bishalgarh bottling plant of IOC, in Tripura, everyday; meeting significant the main demand in the considerably Northeastern State.
Bishalgarh plant has capacity constraints. Imports from Bangladesh to move up by five to six tankers, a evening, with your competition of a greater center near Agartala that may cater part of the demand in Silchar, the next largest consumption center in Assam.
Tolling opportunity
While lower transportation expense brought savings to IOC; the company exploring means to reduce the costs.
Bangladesh imports its complete LPG need through imports. In the past such imports were carried out from South East Asian places.
Because of lower freight opportunity, majority Bangladeshi imports are actually made via an offshore facility, next to Dhamra Port found in Odisha. However, because of their tiny parcel size, Bangladeshi imports are costlier than in India.
IOC feels, costs could be reduced further if it's permitted to export LPG to Bangladesh, through Mongla Port, for processing and re-export to Northeastern Says. Some port-centered facilities in Mongla (Bangladesh) expressed fascination in the proposal.
However, any such procedure would require the Centre to lift embargo in LPG exports.
IOC also entered an MoU with Bangladesh Petroleum Corporation in 2016 to set up a LPG terminal, found in joint venture, in Chittagong. The proposal didn’t see much progress as BPC couldn’t give land, suitable to create a deep draft terminal that may accommodate large carriers.
IOC is now negotiating with some exclusive operators for suitable option.
Expanding services
While the proposal for LPG terminal and/or tolling facility continues to be on the drawing board, IOC is discovering the possibility of growing the scope of current arrangement to even more northeastern States.
Since Bangladesh shares almost 2000 km boundary with the northeastern Says of Tripura, Assam, Meghalaya, Mizoram etc; theoretically there is normally scope of import of bulk LPG and also bottled LPG from Bangladesh.
However, this arrangement could also require relocation or reorganisation of the prevailing depots and bottling crops, that have been built on very different transport logistics considerations.
Transfer of LPG from India to Northeast through Bangladesh working with the recent expansion of the inland normal water transport protocol can be a possibility. However, that won't happen before the Sirajganj and Daikhawa river-way in Bangladesh is opened up.
The route is currently heavily silted. Dredging operations with 80 % economical support from India is currently in first stages of implementation.
Source: https://www.thehindubusinessline.com