Bitumen, fuel to get costlier
- Higher crude oil price to push up bitumen production cost, says M Tamim
- Crude oil price to reach $105 per barrel in early 2023: Goldman Sachs
The price of bitumen is likely to rise by Tk 1,000-1,200 per barrel coupled with a further hike in fuel tariff in the country as the global price of crude oil, the raw material for producing bitumen, has jumped by 23 percent in the last one month.
The crude oil price has increased alarmingly recently in the global market. The Brent crude oil price has surpassed $88 per barrel, which is highest in seven years.The Brent crude price has been rising by leaps and bounds for the last three consecutive weeks, shooting up by 23 percent in the last one month.
During the corresponding period last year, the Brent crude oil price was $55.90 per barrel which went up to as high as $87.89 on Friday.
Besides, the WTI crude price is on the rise as well and it stood at $85.14 on Friday.
Energy Expert Dr M Tamim said: “The global oil price is rising after new tensions arose in the Middle East. As a whole, unrest has been created in the global oil market.”
“Since bitumen is produced from crude oil, the production cost of bitumen will also shoot up with the rise in global crude oil prices. So, the bitumen price may go up. Any step to this end should be taken by observing the global market more,” he added.
In the first week of January, the Brent crude price rose by 5.12 percent to $81.76 per barrel. And in the second week, it soared 5.77 percent to $86.47 whereas the price was $71.57 one month ago.The total demand for bitumen in the country is some 5 lakh tonnes per year, of which lone state-owned Eastern Refinery Ltd produces only 60,000-70,000 tonnes.
In the past, most of the demand was used to be met through import of low-quality and adulterated bitumen.
As a result, roads get dilapidated developing potholes even within six months of construction, adding to public sufferings and decreasing lifespan of the vehicles plying such roads.
The high cost of repairing and maintaining roads due to the use of substandard bitumen leads to wastage of public money, according to departments concerned of the government and experts.
But now the situation has started to change as a large bitumen factory has been set up at the private sector to ensure the supply of quality bitumen locally.
Bangladesh Petroleum Corporation Chairman ABM Azad said: “We’re still observing the global hike in the price of crude oil, bitumen’s raw material. The next step will be taken after assessing the situation.”
US investment bank Goldman Sachs has expressed concern over the crude oil supply crunch, also citing OPEC country’s capacity shortfall in oil supply.
In view of this, Goldman Sachs predicted that the crude oil prices may soar to as high as $100 in the third quarter this year and at the outset of next year the price may jump to $105 per barrel.
It also informed that oil reserve in developed countries declined to the lowest level since 2000 as a result of the global supply crisis.
Apart from the bitumen price, the spike in crude oil price may have negative impacts on the prices of diesel, petrol and other types of fuel as well in the country.