Skip to main content

Modi, Shiekh Hasina to 'oil' friendly relations via 130 km long diesel export pipeline

Dr Arpita Hazarika* 
India will begin exporting diesel to neighbouring Bangladesh through a pipeline this month after Indian Prime Minister Narendra Modi and his Bangladeshi counterpart Sheikh Hasina inaugurate the cross-border oil pipeline on 18 March.
“Good news is India will send us diesel, the (oil) pipeline has been completed. The two premiers will inaugurate the pipeline on 18 March,” Bangladesh Foreign Minister Dr AK Abdul Momen said. The India-Bangladesh cross-border pipeline will be inaugurated by the Prime Ministers of Bangladesh and India virtually.
Till now, Bangladesh used to import diesel from India through railway carriages. The announcement of India-Bangladesh friendship pipeline (IBFPL) launch by Momen came a week after he held talks with Indian counterpart, India’s External Affairs Minister Dr S Jaishankar on the sidelines of the G20 Foreign Ministers’ meeting last week in New Delhi.

Oil pipeline

India would export diesel to Bangladesh through the 130-km pipeline. The India-Bangladesh oil pipeline has been constructed at a cost of Rs 3.46 billion and has been drawn from the Indian line of credit (LoC). The pipeline stretched 125-kilometre inside Bangladesh territory and 5-kilometre inside India.
The cross-border pipeline will carry fuel from Assam-based Numaligarh Refinery Ltd’s (NRL) marketing terminal at Siliguri in eastern Indian state of West Bengal to the Parbatipur depot of Bangladesh Petroleum Corporation (BPC).
The mechanical works of the project was completed on 12 December last year. The ground breaking ceremony for IBFPL was held in September 2018 in the presence of PM Modi and PM Hasina through video conferencing.
During his meeting with Hasina in 2017, Prime Minister Narendra Modi had agreed to finance the cross-border pipeline with a capacity of one million metric tonne per annum (MMTPA). The project once completed will solve the problem that 100,000-ton tankers cannot dock at Chittagong Port, Bangladesh, and must rely on maritime ships to transport crude oil.
The pipeline with India will cut transportation cost of fuel oil for Bangladesh by 50 percent, State Minister for Power, Energy and Mineral Resources Nasrul Hamid has said. State Minister for Power, Energy and Mineral Resources Nasrul Hamid said the Bangladesh-India Friendship Pipeline will effectively contribute to the country's energy security. "It [the pipeline] will be a milestone in providing quick and uninterrupted fuel supply to the northern region of the country in a cost-effective manner,"
During a visit to the receipt terminal at Parbatipur in Dinajpur, Nasrul described the India-Bangladesh Friendship Pipeline as groundbreaking in Bangladesh’s energy history. “It will ensure energy security and low-cost fuel.”
In the near future, Bangladesh needs to transition from conventional energy sources to ensure its energy security and long-term sustainability. Following the Ukraine crisis, energy security has become a major concern for developing and least-developed countries. In this context, cross-border energy cooperation and revitalising the idea of the power corridor could perhaps help Bangladesh to mitigate its energy crisis.
Friendly and warm relations between Bangladesh and India since the birth of Bangladesh in 1971. In any time of crisis, India and Bangladesh have got each other's side just like a close mother. Be it the current corona epidemic, or the liberation war of 1971.
However, the whole world is currently in a turmoil due to the post-pandemic wartime global crisis. Along with the political and economic crisis, the energy crisis has also intensified. Bangladesh is also in the grip of this crisis. To solve this global energy crisis, Bangladesh government has decided to reduce energy consumption.
Importing fuel oil at an affordable price was very important for Bangladesh to reduce this cost. Although talks were started with countries like Saudi Arabia, Malaysia and Brunei about the import of fuel oil, Bangladesh's neighboring friendly country India was the first to come forward to supply fuel.
The initiation of multi-dimensional avenues of cooperation with Bangladesh is only possible because of its geographical proximity to India. A prime example of this is the import of diesel from India through pipelines. These imports will ensure maximum utilization of Bangladesh's geographical proximity to India.
Diesel will arrive in the pipeline from India in June this year. Once this diesel starts coming in, it will be profitable for both Bangladesh and India. In this diesel trade, both countries will benefit economically and Bangladesh will be able to face its energy crisis more firmly. India will also benefit from it.
India will earn revenue through this diesel export. India has already expressed a positive attitude towards increasing cooperation with Bangladesh. Not only that, recently Bangladesh-India has signed several agreements and memorandum of understanding to increase bilateral trade and investment.

Diesel trade

Since 2017, India-Bangladesh diesel trade has been going on through railways. About 2,200 tonnes of diesel is sent from Numaligarh Refinery Limited through West Bengal Railway every month. This transportation cost was very expensive for Bangladesh Petroleum Company. When this pipeline is operational, the supply of fuel in the country will increase significantly and the cost of transporting fuel by rail will be reduced. As the demand for diesel is highest in 16 districts of northern region during Aman and Boro season, the government decided to import this fuel through pipeline.
If the project is implemented, diesel will reach consumer level in 16 districts of Rangpur and Rajshahi divisions within a short period of time. As a result, besides saving a huge amount of money, it will be able to provide it to the farmers at a low cost in a short period of time.
This export of India will not only strengthen Bangladesh's economic relationship with India but also strengthen the bond of friendship during energy crisis as well as dollar crisis. Apart from ensuring uninterrupted, cheap and fast fuel supply, the cross-border pipeline is also expected to help reduce system losses through petty pilferage due to rail transport.

Partnership agreement

An agreement was signed between the two countries in November 2018 to implement the India-Bangladesh Partnership Pipeline Agreement project. The work of this project started in March 2020. whose term was till June 2022; But the project has been extended till July 2023 as the pace of work has slowed down due to the Covid-19 pandemic.
Now the construction of this Bangladesh-India friendship pipeline is almost at the final stage. The 131.57 km long pipeline project connects Siliguri and Parvatipur, Dinajpur in West Bengal. Out of the total length of the pipeline, 126.50 km is inside Bangladesh and the remaining 5.07 km is in India.
Out of the construction cost of Tk 520 crore, Government of India is contributing Tk 303 crore and BPC is paying the remaining Tk 217 crore. About 1 million metric tons of diesel can be imported from India annually through this pipeline. However, in the initial phase, two and a half lakh tons will be imported. According to the 15-year agreement, the import volume will increase by 4 to 5 MT annually.

Light of hope in times of crisis?

When Bangladesh along with the rest of the world is troubled by the energy crisis, this diesel business is showing a kind of light of hope. An alternative source of diesel import is being created for Bangladesh through this pipeline.
According to Bangladesh Petroleum Corporation data, Bangladesh imports 6.5 million tons of fuel oil annually. Among these imported fuels, 4 million tons of diesel are imported annually. About fifty percent of the imported fuel will come to this country by reducing the significant amount of transportation cost through this pipeline.
Moreover, according to Bangladesh Petroleum Corporation data, currently the average premium cost per barrel (159 litres) of fuel oil (including freight) is $10. If this fuel is imported from India, it costs eight dollars. A reduction of two dollars per barrel can save about $1.5 million per 100,000 tons.
Apart from taking less time for fuel supply, the people of 16 districts of the northern region will be able to enjoy this benefit. So, importing from India will also save foreign exchange. Now if it is possible to import in rupees instead of dollars, our dollar crisis will be reduced to some extent. Later, if India gives some price concession to Bangladesh, Bangladesh may benefit more.
Exporter India on the other hand can earn foreign currency inflows from its export earnings and invest it in other sectors to benefit economically. Even if India exports refined oil to Bangladesh at cheaper prices, it will bring overall economic benefits to both countries.
India and Bangladesh through bilateral and multilateral energy cooperation can address the global problem of high energy prices in the wake of the Russia-Ukraine war. When diesel starts coming in, the India-Bangladesh alliance pipeline, if properly managed, could be a prime example of bilateral energy cooperation. Not only this, it will usher in a new dimension in energy cooperation between India and Bangladesh.
---
*Researcher, Gauhati University, Assam

Comments

Post a Comment

TRENDING

Loktantra Bachao Abhiyan raises concerns over Jharkhand Adivasis' plight in Assam, BJP policies

By Our Representative  The Loktantra Bachao Abhiyan (Save Democracy Campaign) has issued a pressing call to protect Adivasi rights in Jharkhand, highlighting serious concerns over the treatment of Jharkhandi Adivasis in Assam. During a press conference in Ranchi on November 9, representatives from Assam, Chhattisgarh, and Madhya Pradesh criticized the current approach of BJP-led governments in these states, arguing it has exacerbated Adivasi struggles for rights, land, and cultural preservation.
Post a Comment
Read more

Promoting love or instilling hate and fear: Why is RSS seeking a meeting with Rahul Gandhi?

By Ram Puniyani*  India's anti-colonial struggle was marked by a diverse range of social movements, one of the most significant being Hindu-Muslim unity and the emergence of a unified Indian identity among people of all religions. The nationalist, anti-colonial movement championed this unity, best embodied by Mahatma Gandhi, who ultimately gave his life for this cause. Gandhi once wrote, “The union that we want is not a patched-up thing but a union of hearts... Swaraj (self-rule) for India must be an impossible dream without an indissoluble union between the Hindus and Muslims of India. It must not be a mere truce... It must be a partnership between equals, each respecting the religion of the other.”
Post a Comment
Read more

Right-arm fast bowler who helped West Indies shape arguably greatest Test team in cricket history

By Harsh Thakor*  Malcolm Marshall redefined what it meant to be a right-arm fast bowler, challenging the traditional laws of biomechanics with his unique skill. As we remember his 25th death anniversary on November 4th, we reflect on the legacy he left behind after his untimely death from colon cancer. For a significant part of his career, Marshall was considered one of the fastest and most formidable bowlers in the world, helping to shape the West Indies into arguably the greatest Test team in cricket history.
Post a Comment
Read more

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.
59 comments
Read more

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah  The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 
26 comments
Read more

Andhra team joins Gandhians to protest against 'bulldozer action' in Varanasi

By Rosamma Thomas*  November 1 marked the 52nd day of the 100-day relay fast at the satyagraha site of Rajghat in Varanasi, seeking the restoration of the 12 acres of land to the Sarva Seva Sangh, the Gandhian organization that was evicted from the banks of the river. Twelve buildings were demolished as the site was abruptly taken over by the government after “bulldozer” action in August 2023, even as the matter was pending in court.  
Post a Comment
Read more

Will Bangladesh go Egypt way, where military ruler is in power for a decade?

By Vijay Prashad*  The day after former Bangladeshi Prime Minister Sheikh Hasina left Dhaka, I was on the phone with a friend who had spent some time on the streets that day. He told me about the atmosphere in Dhaka, how people with little previous political experience had joined in the large protests alongside the students—who seemed to be leading the agitation. I asked him about the political infrastructure of the students and about their political orientation. He said that the protests seemed well-organized and that the students had escalated their demands from an end to certain quotas for government jobs to an end to the government of Sheikh Hasina. Even hours before she left the country, it did not seem that this would be the outcome.
Post a Comment
Read more

Will Left victory in Sri Lanka deliver economic sovereignty plan, go beyond 'tired' IMF agenda?

By Atul Chandra, Vijay Prashad*  On September 22, 2024, the Sri Lankan election authority announced that Anura Kumara Dissanayake of the Janatha Vimukthi Peramuna (JVP)-led National People’s Power (NPP) alliance won the presidential election. Dissanayake, who has been the leader of the left-wing JVP since 2014, defeated 37 other candidates, including the incumbent president Ranil Wickremesinghe of the United National Party (UNP) and his closest challenger Sajith Premadasa of the Samagi Jana Balawegaya. 
1 comment
Read more

Green Revolution’s reliance on chemical fertilizers, pesticides contributing to Punjab's health crisis

By Bharat Dogra, Jagmohan Singh*  Punjab was once synonymous with robust health, particularly in its rural areas, where farmers were known for their strength and vitality. However, in recent years, reports from these villages tell a different story, with rising cases of serious health issues, including cancer. What led to this decline? The answer lies largely in the erosion of good nutrition, once a hallmark of Punjabi village life. The health of a population is closely tied to its nutrition, and Punjab's reputation as a provider of high-quality nutrition has suffered greatly. The loss of biodiversity in agriculture has led to a decrease in the variety and quality of crops, resulting in poorer nutrition. Pulses, a key source of protein, have seen a steep decline in cultivation due to the disruption of traditional farming practices by the Green Revolution. This has had a detrimental effect on both soil and human health. Although pulses are still available in the market, they are exp
Post a Comment
Read more

Tributes paid to pioneer of Naxalism in Punjab, who 'dodged' police for 60 yrs

By Harsh Thakor*  Jagjit Singh Sohal, known as Comrade Sharma, a pioneer of Naxalism in Punjab, passed away on October 20 at the age of 96. Committed to the Naxalite cause and a prominent Maoist leader, Sohal, who succeeded Charu Majumdar, played hide and seek with the police for almost six decades. He was cremated in Patiala.
Post a Comment
Read more