Dhaka : Kuwait has agreed to supply fuel to Bangladesh for another year after the current deal expires at the end of this year, a senior energy official said yesterday.

The extension was agreed after a Bangla-desh team visited Kuwait last week, led by Shaikh Khurshid Alam, chairman of state-owned Bangladesh Petroleum Corporation (BPC), the country's sole fuel importer and distributer, the official said.

He said Kuwait Petro-leum Corporation (KPC) was in favour of extending the deal for two years but BPC preferred a one-year extension.

The deal which expires at the end of December was for two years, from January 2005.

BPC annually imports nearly 2.3 million tonnes of refined fuel from KPC against total demand of about 3.8 million tonnes.

Monitor prices

It imports the rest of the fuel from Saudi Arabia, the UAE and India. BPC and KPC will sign the new one-year deal by this month.

"BPC wants to monitor oil prices in the international markets to look for a more suitable source over the next one year," said the official, who asked not to be identified.

Energy officials said the cost of Bangladesh's fuel imports to the end of June 2006 grew 34.6 per cent to $2.1 billion, from $1.56 billion in the previous fiscal year.

The import bill for fuel in 2007 was expected to be at the same level, unless prices in global markets rose again, officials said.