Special Correspondent:
Super Petrochemical PLC (SPL) is constructing an oil refinery in Karnaphuli, Chattogram, without obtaining the required government approval, according to a committee formed by the Bangladesh Petroleum Corporation (BPC). The committee has also found that the company did not obtain BPC approval for importing a large volume of capital machinery and equipment for the project.
The committee is also examining whether several units of the refinery have been installed outside the framework prescribed by the relevant government policy.
Under Section 7.1 of the Policy for Establishment of Private Sector Refineries, Import of Crude Petroleum, Storage, Processing, Transportation and Marketing, 2023, no refinery can be established without government approval. However, SPL has proceeded with its refinery project in Karnaphuli without complying with this provision.
Mohammad Zahid Hossain, General Manager (Commercial and Operations) of BPC and head of the seven-member committee, disclosed the findings to journalists on Thursday afternoon, following an inspection of the plant on Wednesday evening.
Zahid Hossain said the construction of the refinery was underway despite the absence of government approval. Some development work has already been completed at the project site, while new storage tanks are also being constructed. The committee inspected the crude processing plant being developed by the company.
He said SPL had submitted some documents related to the plant, which were currently under review. The committee would include in its report only the information and documents submitted by the company. The alleged construction of Units 2 and 3 beyond the scope of the existing policy may also be addressed in the report.
Responding to a question about how the company imported a substantial volume of capital machinery without BPC approval, the committee chief said SPL had never sought permission from BPC to import the capital equipment and other machinery for the project.
Earlier, on Tuesday (November 10), BPC Secretary Shahina Sultana issued an office order forming the seven-member committee. The committee was instructed to submit a report with recommendations within three days regarding approval for SPL to commence refinery operations.
However, uncertainty remains over whether the report can be submitted within the stipulated timeframe. Zahid Hossain said the committee had only recently completed its inspection and might seek further clarification and documents from the company. Other committee members would review the relevant issues before finalising the report.
Regarding Wednesday’s inspection, Zahid Hossain said committee members spent more than three hours at the plant examining various aspects of the facility. However, the actual technical capacity of the refinery was not assessed during the visit.
He clarified that the committee did not operate or test individual machinery or plant units. Such examinations would be conducted by a technical committee, which would assess whether the plant’s input and output processes were functioning properly. The final decision on granting permission to commence production would rest with the relevant ministry.
Meanwhile, questions have emerged within the energy sector over the process of recommending operational approval for a refinery before completing a comprehensive assessment of its technical capabilities.
Industry stakeholders say that granting approval without properly examining industrial safety, technical capacity and environmental risks could create potential threats to the country’s energy security.
Establishing and operating a refinery requires more than 30 approvals and clearances from various government agencies. These include approval from BPC and Bangladesh Bank, location and environmental clearances from the Department of Environment, licences from the Fire Service and Civil Defence, approval from the Department of Explosives, and layout and safety approvals from the Department of Inspection for Factories and Establishments.
Other mandatory formalities include special permits from the Office of the Chief Controller of Imports and Exports, customs bonded warehouse licences from the National Board of Revenue (NBR), VAT registration and several additional regulatory clearances.
Allegations have surfaced that SPL did not properly follow the mandatory approval procedures while establishing the refinery. The absence of BPC approval for importing a substantial quantity of capital machinery has become a particular point of concern.
Questions have also been raised over whether there were any customs duty evasion or misdeclarations in the machinery imports, including the possibility of other goods being imported under the declaration of industrial equipment. However, these allegations have yet to be independently established.
Amid these concerns, SPL has applied to BPC for permission to import a total of 1.2 million tonnes of crude oil annually, comprising 400,000 tonnes of light crude and 800,000 tonnes of heavy crude.
The company’s request to import such a large quantity of crude oil, despite questions surrounding the approval status of its refinery project, has triggered further concerns within the energy sector.
Energy sector experts emphasise that government approval, technical capability, industrial safety and environmental compliance must be thoroughly assessed before a refinery is established and allowed to operate.
They warn that moving forward with operational approval without completing these procedures could expose weaknesses in the country’s regulatory oversight system.
Experts have also called for a high-level investigation into the imported machinery and the overall activities of the project. They say allowing an unauthorised refinery to begin production without ensuring proper regulatory supervision and safety standards could pose long-term risks to Bangladesh’s energy security.
