The state-run Bangladesh Petroleum Corporation (BPC) has now reached the break-even point as far as marketing of oil products is concerned owing to a sharp fall in oil prices in the international market.
It is a big sigh of relief for the BPC as it was incurring a loss of around Tk 270 million every day only three months back due to substantial rise in international oil price, a senior BPC official said.
The BPC was then suffering a loss of around Tk 17 on account of marketing a litre of diesel and Tk 15 a litre of furnace oil.
"Now we neither incur any loss nor make any profit in diesel trading," said the official.
BPC, however, incurred a loss of around Tk 4 per litre in furnace oil trading, considering the oil price in the international market last week, he said.
But the loss is not significant one as BPC imports a small quantity of furnace oil, about 500,000 tonnes, while it imports around 5.0 million tonnes of diesel every year to meet local demands, the official added.
The price of Brent crude, the benchmark in international oil price, ranged around $ 55 per barrel as on December 21 which was $ 84.88 per barrel on October 02, 2018, $ 47 in June 2017 and below $ 30 in early 2016.
The BPC had estimated an annual loss of around Tk 97 billion in oil trading, considering October oil prices in the international market.
The state-run oil corporation had sought Tk 85 billion as subsidy from the finance ministry to foot oil import bills for the fiscal year (FY) 2019.
But if the current downtrend in oil price in the international market continues, the BPC would not require any subsidy from the government, BPC officials said.
The current price of furnace oil at the retail level is Tk 42 per litre, that of diesel and kerosene Tk 65 per litre. Octane and petrol are being sold at Tk 89 and Tk 86 per litre respectively.
The government through an executive order on April 24, 2016 fixed the price and since then, the price remained unchanged.
After bagging hefty profits over the past three years since late 2014, officials said, the BPC started incurring loss since November, 2017.
The BPC booked a profit of Tk 42.12 billion in fiscal year 2014-15 (FY 2015) while Tk 63.42 billion in FY 2016 and Tk 43.99 billion in FY 2017, according to BPC statistics.
It also paid Tk 22 billion to the government exchequer in FY 2016 and FY 2017 as dividend.
The corporation also paid dues worth Tk 30.90 billion to state-owned Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank, Tk 17.58 billion to Petrobangla and Tk 6.03 billion as overdue value-added tax (VAT) to the National Board of Revenue (NBR) over the past several years from its profits.
Before late 2014, it had incurred a loss of Tk 23.32 billion in FY 2013-14 and Tk 48.32 billion in FY 2012-13. In FY 2011-12, the loss was Tk 113.71 billion, which was Tk 88.40 billion in FY 2010-11. The BPC counted losses every year during the period between FY 2001-02 and FY 2013-14.
The BPC imported 6.7 million tonnes of petroleum products including diesel, jet fuel, furnace oil and octane in FY 2018.
In FY 2019, it might require to import around 7.5 million tonnes of different petroleum products.
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