Bangladesh Petroleum Corporation (BPC) recorded a 9.46-percent rise in profit in the last fiscal year (FY 2024-25), driven by the automatic fuel-pricing formula introduced in March 2024.
The state-run organisation posted earnings of Tk 42.16 billion, up from Tk 39.43 billion in the previous fiscal year (FY 2023-24).
Tax payments to the government rose at the same pace, with BPC contributing Tk 16.07 billion to the exchequer in FY25, compared with Tk 14.68 billion a year earlier.
Officials attribute the improved performance to the pricing mechanism that allows domestic fuel prices to adjust in line with international market movements.
BPC has also continued to generate profits during the first five months of the current fiscal year, benefiting from the stable margins ensured under the formula.
"We have been consistently making profits for the past decade since FY15, except for one year when the Russia-Ukraine war began in FY22," BPC Chairman Md Amin Ul Ahsan told The Financial Express on Thursday.
With the introduction of the automatic fuel pricing formula, BPC's profitability has been sustained, he said. "We are making profits as petroleum products are being sold at higher rates than their cost prices under the new pricing structure."
According to another BPC official, the corporation currently earns up to 2.0 per cent profit on diesel sales and as much as 10 per cent on octane and petrol.
He said BPC has also remained profitable over the past five months of the current fiscal year (FY 2025-26), though he did not disclose the figures.
In the latest monthly adjustment for December, the government raised pump prices of diesel, kerosene, petrol, and octane by Tk 2.0 per litre each to Tk 104, Tk 116, Tk 120 and Tk 122 respectively.
The Energy and Mineral Resources Division (EMRD) said prices had been kept steady to ensure reasonable rates and stable supply.
"We have kept the price of kerosene significantly above diesel over the past several months following reports of kerosene being mixed with octane and petrol," the BPC chairman said.
Kerosene is currently priced 11.53 per cent higher than diesel. "After increasing kerosene prices, fuel adulteration has stopped," he added.
When setting domestic fuel prices, the government typically relies on Platts' refined product assessments, while crude oil prices are benchmarked against S&P Global Platts' Dated Brent.
In February 2024, BPC prepared a guideline for automatic fuel pricing in which all costs are factored in, including international prices, import duties, advance income tax, VAT, operational and administrative costs, maintenance, BPC margins, and distributor margins.
The guideline specifies that octane and petrol, classified as luxury fuels, must always be priced at least Tk 10 per litre above diesel.
Azizjst@yahoo.com
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