BPC to get $100m loan from Agrani Bank soon

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FE Report
The Bangladesh Petroleum Corporation (BPC) has sought US$ 100-million worth of funds from a state-owned commercial bank to foot its fuel oil import bill, sources said.
"A process is on for early release of the said amount of foreign currency from the Agrani Bank to meet the BPC's immediate fuel import costs," an Energy Division source said.
The Corporation has sought the amount as part of its current initiative to mobilise loans from the local banking system under the credit support of the country's central bank, said officials.
The loss-making BPC is also expected to receive another $ 200 million worth of credit from two other state-run commercial banks - Sonali and Janata, they mentioned.
The state-run BPC has been facing acute fund shortage for meeting its fuel-oil import costs, the sources said, adding that the Corporation has to import around 3.8 million tonnes of fuel oil per annum to meet the domestic requirement.
The Corporation requires import of a significant quantity of petroleum oil, especially diesel, to cope with the demand that will rise during the upcoming 'Boro' cultivation season, the sources added.
The central bank recently assured the state-run commercial banks of providing $ 300 million worth of credit support for financing the BPC's fuel import costs following a request from the Energy Division to this effect.
Against the backdrop, the Agrani Bank has already submitted its credit proposal to the central bank for sanctioning the proposed loan for a period of one year.
Sources, however, said the central bank is scrutinising the terms and conditions for the proposed credit support to the state-owned commercial banks.
Apart from the local bank funds, the BPC is also looking for credit support from a multilateral development agency namely the Islamic Development Bank (IDB), an official noted.
"The current steps to raise credit both from internal and external sources has been taken against the backdrop of an acute fund crisis that the BPC has been facing mainly due to selling fuel oils in the country at much lower price than its import cost, said the official.
According to official figures, the BPC incurred a loss worth Tk 3.77 billion during the July-August period of the current fiscal.
Energy division sources indicated that the Corporation's total losses could exceed Tk 13.0 billion by the end of this fiscal.
The figures also showed the BPC incurred losses to the tune of Tk 24.45 billion last financial year.
Although the government recently took up an initiative to offset the BPC's losses through an upward adjustment of its existing fuel prices, it has postponed the move following the rising inflationary pressure on the economy.