State-owned Eastern Refinery faces production uncertainty

Operations at the country's only state-owned refinery, Eastern Refinery PLC, are under production threat as a shortage of imported crude oil has pushed the facility toward a potential shutdown within days.

The refinery, located in Patenga, Chattogram, has been facing a severe supply disruption after scheduled crude shipments from Saudi Arabia and the United Arab Emirates were delayed due to geopolitical tensions and ongoing conflict-related disruptions.

Officials said the shortage has already forced a significant reduction in processing capacity, with production expected to halt completely within a week if new supplies do not arrive.

Eastern Refinery, a subsidiary of the Bangladesh Petroleum Corporation (BPC), has traditionally processed “Arabian Light Crude” from Saudi Arabia and “Murban Crude” from the UAE to produce diesel, petrol, octane and other petroleum products.

BPC Chairman Md. Rezanur Rahman said crude shortages have disrupted operations but confirmed that production has not fully stopped yet. “We may have to shut down operations within a few days if new shipments do not arrive,” he said.

He added that efforts are underway to import 1,00,000 tonnes of crude oil from Malaysia, but the shipment remains uncertain as the supplier has yet to deposit the required security guarantee. A vessel is, however, expected to arrive early next month.

According to BPC and refinery sources, Eastern Refinery has a crude storage capacity of around 2,25,000 tonnes. Before the crisis, stock stood at about 1,50,000 tonnes, but usable reserves dropped to just 19,000 tonnes as of April 1. An additional 33,000 tonnes is classified as dead stock and unusable under normal conditions.

A further 5,000 tonnes were transferred from the Single Point Mooring (SPM) project’s storage tanks, but officials said that supply has also been exhausted.

The refinery operates five main units, including the Crude Oil Distillation Unit, Asphaltic Bitumen Plant, Visbreaker Unit, Catalytic Reforming Unit and Condensate Fractionation Plant. The primary distillation unit has already been shut down due to lack of crude supply.

BPC General Manager Muhammad Morshed Hossain said limited production is still ongoing, with around 120 tonnes of petrol and 100 tonnes of octane produced daily, along with diesel and bitumen. However, output has been significantly scaled back.

According to BPC data, Bangladesh imports 6.8 to 7 million tonnes of fuel annually, including around 1.5 million tonnes of crude oil mainly from Middle Eastern countries, which is processed at Eastern Refinery to produce 16 types of petroleum products.

Officials warned that without fresh crude shipments, refinery operations and domestic fuel supply stability could face serious disruption in the coming days.