BPC fears net loss of Tk 84.47b over two fiscals

Rezaul Karim | Published: March 22, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

The Bangladesh Petroleum Corporation (BPC) has a fear of incurring a net loss of over Tk 84.47 billion over two consecutive fiscal years (FYs) including the current one.
The BPC purchases fuel products from the international market and sells the same at lower rates in the domestic market incurring a significant amount of loss every FY.
The country's oil consumption increased many times in the wake of introduction of oil-fired power plants. So, the amount of subsidy for purchasing fuel from the global market also increased, sources said.
"We guess the BPC's pre-tax loss may stand at Tk 29.62 billion in the current FY in view of the stable petroleum oil prices in the international market and the hike in oil prices in the domestic market last fiscal," a top BPC official told the FE Thursday.
On the other hand, the amount of loss of the cash-strapped BPC might rise to Tk 54.85 billion in the FY 2014-15 in view of the current international market prices and the domestic oil prices," he said.
The state-owned entity incurred a pre-tax net loss of Tk 53.08 billion on account of import of petroleum oil in the FY 2012-13.
The BPC paid around Tk 50.22 billion in the forms of tax, VAT and other duties to the National Board of Revenue (NBR) in the FY 2012-2013. The amount was 7.05 per cent higher than that of the FY 2011-2012.
The government has set the target of fuel subsidy at Tk 28.75 billion in the current fiscal. It has also estimated the demand for fuel at 5.3 million litres, according to the energy ministry sources.
The government has set a revised target to sell 5.11 million tonnes of oil products in the current fiscal in accordance with the growing demand in the local market against 4.989 million tonnes in the last FY.
Bangladesh's demand for diesel and furnace oil is growing sharply following establishment of expensive oil-fired power plants in the last couple of years, according to BPC sources.
Sales of liquefied petroleum gas (LPG) in the first and second months of the current calendar year decreased significantly due to allowing new gas connections and LPG bottling in the private sector, sources said.
The demand for diesel and furnace oil required to run power plants would increase by 41,000 tonnes and 2,000 tonnes respectively in the current FY, according to the BPC data.
The BPC imported 0.488 million tonnes of crude oil and 2.142 million tonnes of refinedÂ oil respectively in the July-December period of the current FY.
The entity has set a target to import 0.786 million tonnes of crude oil and 1.90 million tonnes of refined oil during the January-June period of the current FY.
The BPC will pay Tk 47.79 billion in tax and value added tax in the current FY, according to the official data.
The cost and freight (C&F) prices of crude oil and refined fuel oil were, on an average, US$ 111.20 per tonne and US$ 125.12 per tonne respectively in the international market in the FY 2012-13. The prices stood at US$ 113.66 and US$ 121.55 in the last July-December period.
The government has set a target to import crude and refined oil to the tune of 1.4 million tonnes and 4.27 million tonnes respectively in the next FY, according to the BPC.