The Bangladesh government is considering restrictions on cargoes of oil delivered on old vessels by the Kuwait Petroleum Corporation (KPCs) on environmental and safety grounds.

But according to officials, pressure on the state-owned Kuwaiti firm could anger KPC, which when upset by its Bangladeshi customer in the past has threatened tougher conditions on or even to reject letters of credit (L/Cs).

Under pressure

Bangladesh's Department of Shipping has asked Bangladesh Petroleum Corporation (BPC) to reject shipments of petroleum products delivered by vessels more than 20 years old.

Since July 2009, BPC has been importing such cargoes delivered by vessels of up to 25 years old, but only after it was pressured by KPC to do so.

Newer vessels

Now the Bangladeshi importer has written to its supplier asking it to deliver petroleum products on newer vessels.

This move could anger the Kuwaitis according to officials.

Threats

In the past, KPC has threatened to reject L/Cs by Bangladesh's state-owned banks for the import of fuel when it has been under pressure from BPC.

In 2008, Kuwait imposed more stringent L/C conditions on BPC, prompting it to search for new sources.

Kuwait is Bangladesh's key oil supplier, although it does now import petroleum products from additional suppliers in Malaysia, the Philippines, the Maldives and Egypt.

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