In the midst of the acute energy crisis plaguing Bangladesh, its government is mulling establishing a long-term partnership with India to import fuel oil from its surplus, the country’s Foreign Secretary Masud Bin Momen has confirmed.
While discussing Prime Minister Sheikh Hasina’s upcoming trip to India, the minister reportedly said that India is in a better position on the fuel issue.
“We will definitely try to enter a long-term agreement with them if they have a surplus. But it will depend on how much they have in excess. They have their own supply and demand thing”, Masud said.
Foreign Secretary Masud was hopeful that the Indian government would agree to assist as India has helped Bangladesh at different times in the past.
Masud stated that in order to address the energy problem, the administration wanted to keep all options open, including importing hydroelectricity from Nepal or crude oil from India.
Fuel crisis in Bangladesh
Bangladesh has lately been dealing with a major fuel crisis. To deal with this, the Bangladeshi government on August 5 increased the price of petrol by 51.7% and diesel by 45.2%.
While speaking about the matter, Minister for Power, Energy, and Mineral Resources Nasrul Hamid had said, “Some adjustments have to be made in view of the global situation. If the situation normalises, the fuel prices will be revised accordingly. The new prices will not seem tolerable to everyone, but we had no other choice. People have to be patient.”
The drastic hike in fuel prices sparked off protests, led to long queues at fuel stations, and even violent demonstrations in various parts of the country.
China lurking to take advantage of Bangladesh’s economic woes
As Bangladesh struggles with the fuel crisis and rising inflation, there have been fears that the economic situation can quickly spiral out of control and the country can become another Sri Lanka due to rising debt. China, as it was present in Sri Lanka, is also lurking to take advantage of the situation in Bangladesh.
China is thinking about using it to its own benefit and expanding duty-free access to 99% Bangladeshi goods and services. The move is likely to benefit the exporters of garments and woven products in Bangladesh.
While speaking about the development, Shahriar Alam, State Minister for Foreign Affairs, said, “It’s good news for Bangladesh as we have a thriving economy based on exports. We already had duty-free access for 98 percent of items exported to China.”
He added, ”The remaining 2 percent, like any other bilateral trade, has been important and sensitive. Now, they have offered duty-free access to 1 percent more from September 1.”
The matter was taken up for discussion during a bilateral meeting between Bangladeshi Foreign Minister AK Abdul Momen and his Chinese counterpart Wang Yi on August 7. China is also eyeing setting up factories and providing technological support in Anowara upazila in the Chittagong district of Bangladesh.
The two countries are also likely to sign an MoU regarding Public-private cooperation, and chalk out plans for increasing aerial connectivity, and Foreign Direct Investment (FDI). China has reportedly promised to help resolve the Rohingya crisis and the internal challenges in Myanmar as well.
Earlier, four state-owned Chinese companies had expressed interest in building a ‘Smart City’ and a metro rail network in Chittagong. China is known to push developing countries into debt by lending money for building infrastructure projects with marginal or no economic returns.
While Bangladesh is relatively safe for now, things may spiral out of control if the Sheikh Hasina government fails to keep inflation and the associated unrest in check. It will then be an uphill task for India to support both Bangladesh and Sri Lanka at the same time.
India bought Russian crude oil at a heavily discounted price
Meanwhile, it is pertinent to recall here how when European nations and the United States had put several sanctions on Russia after its invasion of Ukraine in February, India bought Russian crude oil at a heavily discounted price. A report by Financial Times stated that while European buyers avoid Russian cargoes of oil, India has almost quadrupled its purchase of Russian crude.
A report in FT states that Russia has sent over 360,000 barrels of crude oil per day to India so far in March, nearly 4 times higher than the average per day exports in 2021.
India, which does not have vast reserves of oil and natural gas and imports over 82% of crude oil and 45% of natural gas from other nations, has been considering all options to avoid the sanctions against Russia and get crude oil at a discounted price. India is the world’s third-largest energy-consuming country.
It is notable here that India and Russia have long-standing and deep trade ties, especially in the defence sector. Both countries have already decided to explore Rupee-Rouble trades, to reduce dependency on US dollars.
