Energy and Mineral Resources Division (EMRD) has urged the government to convert Bangladesh Petroleum Corporation's (BPC) Tk 274.20 billion worth of outstanding debt into subsidies.
The state-run BPC owes such accumulated debt to the government on account of its losses because of selling petroleum products at lower- than-procurement prices.
The EMRD in a recent letter sought the Finance Ministry's necessary steps in this connection, according to officials.
When contacted, a senior BPC official said, "EMR division has already made an appeal to the Ministry of Finance (MoF) for taking necessary steps so that the BPC gets rid of its debt burden."
Officials at the MoF said they will scrutinise the EMRD's plea for converting the BPC's outstanding debts into subsidy.
They, however, said it will take some time to make a decision on the issue.
According to the energy division, the BPC faced a total of Tk 517.05 billion in losses from 1999-2000 to 2013-14 fiscal years (FYs) due to the mismatch between selling prices and import costs of petroleum products.
To help lessen its losses, the government had provided Tk 15.0 billion as cash subsidy along with issuing Tk 159.57 billion worth of bonds in favor of the BPC.
Despite such government support, the BPC's debt liability to the government is estimated at Tk 274.20 billion, the EMRD said in its letter.
Keeping this in view, the EMR has made the appeal for conversion of the BPC's debts into subsidy, officials said.
Although the energy division had made similar appeals to the finance division in April and December, 2021, and May, 2025, no decisions were taken in this regard, the letter revealed.
BPC Chairman Md. Amin Ul Ahsan said: "The Corporation previously sold fuel oils at lower prices at consumers' levels than its actual import costs". As a result, such price gaps soared up the volume of subsidy on account of marketing fuel oils in the domestic market, said the BPC chairman.
"The MoF the outstanding amount will be treated as loan, not subsidy. But we argued that it was supposed to be a subsidy as fuel oils were sold at lower prices than their import cost at consumers' levels," Mr. Ahsan said.
At present, the state-run BPC has no liquidity problem as it has sufficient amount of working capital, he said. As a result, the Corporation is now capable of settling its import payments on its own, according to the BPC chairman.
Besides, there is no shortage of US dollars in the local market, he added.
Although a review meeting on May 13, 2025 was informed that all the liabilities of the state-run Petrobangla and BPC were written off, no such letter from the MoF was found in the energy division.
Besides, a tripartite meeting, which was held in March, 2025, also discussed the issues relating to the settlement of debt service liability of BPC and other agencies to the government.
The BPC purchases oil products from the international market and sells those in the domestic market.
It borrows mainly from The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group, to finance its imports.
The BPC has arranged U$1650 million worth of suppot from Islamic Development Bank (IDB) this year to purchase oil.
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