Govt plans to pay entire Tk 72.46b BPC deficit

The government is now weighing the option of paying the full amount of Tk 72.46 billion that has accrued to the Bangladesh Petroleum Corporation (BPC) in net deficit over the years.

The amount has fallen overdue over the last 14 fiscal years, officials have said.

"We have applied to the government seeking settlement of the previous net outstanding amount. The issue has not been settled yet," BPC Chairman Md Eunusur Rahman told the FE Friday.

He said "We learnt that the authority concerned was scrutinising the plea. We hope the authority would take a proper decision on the issue soon to keep its fuel imports and supplies uninterrupted across the country."

The BPC sent a letter to the Power Division under the ministry of power, energy and mineral resources (MoPEMR) late last month, seeking the outstanding deficit amount which had been lying unpaid between 1999 and 2013, sources said.

The Power Division sent the letter to the ministry of finance (MoF) on June 11 last for taking necessary steps in this connection.

The finance ministry officials said they had paid Tk 59.35 billion to the BPC last year in the form of subsidy through issuance of bonds against three state-owned commercial banks (SoCBs). The remaining outstanding subsidy of Tk 72.46 billion, as claimed by the BPC, is to be paid as early as possible.

Bonds worth Tk 25.21 billion were issued in favour of the Sonali Bank, the largest SoCB, while bonds worth Tk 16.01 billion were issued for Janata and Tk 18.12 billion for Agrani Bank, the BPC data showed.The BPC deficit was gradually increasing in the absence of adjustment of domestic fuel prices with those in international markets. As a result, the government was paying a large amount of subsidy every year, a BPC source said."Fuel prices in international market are increasing due to the political unrest in Iraq. It is our great concern. We may face challenges in future," the BPC chairman said.The BPC sought the amount from the government to keep its fuel imports and supplies uninterrupted throughout the year.The letter said the BPC owed Tk 22.17 billion to the International Trade Finance Corporation. The amount had to be paid by the current month.Besides, the BPC owes Tk 8.819 billion to four state-owned banks, Tk 11.78 billion to Petrobangla and Tk 577.9 million to Bangladesh Gas Fields Company Ltd, according to the BPC data.