Numaligarh Refinery Ltd (NRL) has delivered a diesel order of 4 thousand million tonnes (TMT) to crisis-hit Bangladesh on September 25, the company said. Bangladesh, which owes around $1 billion to Indian power companies, has no payment dues to NRL.
NRL, a unit of state-run Oil India Ltd (OIL), has received a Letter of Credit (LC) for the recent order and expects payment in the next 30 days. This is the second round of delivery by the refinery to Bangladesh in September.
It is not known how much the deal is worth.
The earlier round of delivery in September also amounted to 4 TMT, and the company has received full payment for that, said NRL. Despite the payment woes to Indian power companies, NRL said Bangladesh has processed payment for all the previous orders to the refinery.
The refinery exported 8.7 TMT of diesel to Bangladesh in August.
NRL had signed a 15-year, long-term sale and purchase agreement in 2017 with Bangladesh Petroleum Corporation (BPC) for the export of HSD (high speed diesel). The orders delivered to the country are part of the same agreement.
NRL supplies diesel to the country through a pipeline connecting its Siliguri marketing terminal to Parbatiput in Bangladesh. The company largely exports diesel to the neighbouring country through the pipeline, whereas wax is supplied in minuscule quantities.
Bangladesh payment crisis
The financial crisis in Bangladesh has worsened over the recent months, primarily due to the ongoing political unrest in the country. In August, former Bangladesh Prime Minister Sheikh Hasina resigned from her post and subsequently fled to India amidst mass protests by students over a quota system for government jobs.
According to media reports, Bangladesh owes more than $1 billion to Indian power companies that supply electricity to the country. Moneycontrol has reported that Bangladesh government is securing forex to settle the outstanding payments to Indian power producers, including SEIL Energy and PTC India.
Adani Power, which supplies electricity to Bangladesh from its 1.6 GW coal-fired power plant in Jharkhand, has approximately $800 million payment due from Bangladesh, according to a report by The Economic Times.
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