Timely settlement of BPDB's dues to BPC

FE Team | Published: July 01, 2023 19:39:39

It hardly makes sense that the Bangladesh Power Development Board (BPDB) has Tk 950 million as outstanding against another state-owned agency, the Bangladesh Petroleum Corporation (BPC). But so far the issue has remained unaddressed. The BPC imports fossil fuels that keep the power plants running, and yet, it is expected to keep bearing losses because of non-payment of dues by a large public sector agency.
It is interesting that a few years ago when BPC was in the green making substantial profits, the ministry concerned took those profits away from BPC. And now that it is in the red, what will be the decision of the ministry? Will it stay mum and let losses mount? The general consumer and industrial consumers are all paying whatever tariff the government sets for power produced, but precisely what will happen if the BPC cannot recuperate sales made to the various producers of power?
Indeed, BPC is in a fix as its debt keeps mounting in the face of non-payment primarily by the BPDB. The corporation imports and supplies petroleum to fire up power plants which use furnace oil. Unfortunately, despite their full dependence on BPC to keep the oil flowing, there is reportedly no mechanism whereby payments are cleared in due time. Now why is that? If all BPC can do is to put in a lame-duck request for payment to be made and if the liable party or parties can ignore that request, this is what happens. One shouldn't forget that Bangladesh is a net oil-importing country and BPC is, by and large, the sole importing authority mandated by government to import oil from international markets. Indeed, it seems that the ministry is perfectly at ease with itself in taking away the profits made by BPC over the last several years when global petroleum prices were high, but is now oblivious to the corporation's financial plight.
Again, the government has hiked the price of electricity for three months in a row at the beginning of this year and is very keen on realising bills from bulk and retail consumers. At the same time, it leaves its own corporation to its own devices (which it doesn't have) to realise unpaid bills from other State bodies. This is ironic because authorities concerned are never short on complaints themselves in citing BPC losses due to abnormal price hike of oil in the international market, but the same authorities turn a blind eye to the real 'losses' the corporation is sustaining due to unpaid billions.
If one looks at BPC's track record, the corporation is treated as a piggy bank by the finance division whereby its profits are regularly tapped into. Bangladesh Economic Review 2022 states that BPC had made an approximate Tk 480 billion profit since FY2014-15. And since 2015, around Tk 130 billion had been tapped into by the government and the BPC used the rest of its profit to develop its various projects. Looking at those values, it appears that BPC hasn't received funds for its own projects, so it makes little sense why this corporation is being put through hardship if its earnings are a big help for the national exchequer. There is no point, at all, in slaughtering "the goose that lays golden eggs". Rather efforts need to be put in to ensure that any entity taking oil from BPC is mandated to pay within a stipulated timeframe or be penalised by the State.