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Factories hit hard on furnace oil supply dearth

Refayet Ullah Mirdha
Furnace oil-run small and medium factories across the country are struggling to keep their production running in the face of high prices of furnace oil. industry insiders said.
These manufacturing units require gas or furnace oil to operate boilers
In Bangladesh, paper mills, dyeing mills, steel and rerolling mills and ceramic factories are the main consumers of furnace oil.
Furnace oil is dark and viscous in appearance, and is obtained by blending residual products of various refining processes with suitable diluents, usually middle distillates, to obtain the
required fuel oil grades.
Furnace oil run industry owners complained they could hardly make any profit after the government re-fixed the furnace oil price at Tk 30 per litre on July 1.2008 from its previous rate ofTk 22 per litre.
The state-owned Eastern Refinery annually produces more than 3.50 lakli tonnes of furnace oil against the demand of more than 4 lakli tonnes.
Shahedul Islam Helal, adviser of furnace oil-run Bengal Carpets Limited, said die problem aggravated as the state-owned Bangladesh Petroleum Corporation (BPC) stopped the supply of the oil 10 days ago.
He said the production in his factory, located at Savar, sub-
stantially slowed down due to supply shortage of furnace oil.
"I failed to make the shipment in time due to shortage of furnace oil,” he said.
"Generally, I need 8000 litres of furnace oil a week for running my factory, but I got only 4000 litres of the oil over the last
few months" he said.
He said the situation has got so bad that he would be obliged to stop production if the BPC fails to restore the supply of the oil.
The BPC has reduced its supply of furnace oil to its industrial consumers to meet the demand of power generating companies for (he oil, industry sources said.
A senior official of the BPC agreed that power stations are the first ones on their list of priority when it comes to supplying furnace oil.
"When the demand for furnace oil increases in the power sector, we reduce supply of the oil to other sectors," he said.
Hasan Salam, president of Bangladesh Industrial Power,
Gas and Furnace Oil Consumers' Association, said he was forced to announce closure of his ancestral factory on July 1 due to higher cost of furnace oil.
"Finally, 1 closed down my paper board mill factory in Rupganj under Narayanganj district as I can hardly make any profit after meeting the production costs," Salam said.
He said at least 500 workers and officials lost their jobs due to closure of the paperboard mill.
Salam said many local ceramic industries in the country's northern districts have already been closed due to higher prices of furnace oil and its non-availability.
reefat@thedailystar.net