Move to settle Biman's fuel oil bills with BPC suffers blow

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S M Jahangir
An official move to help Biman Bangladesh Airlines settle its outstanding fuel oil bills with Bangladesh Petroleum Corporation (BPC) has suffered a blow following Biman's dispute with the National Board of Revenue (NBR)over import duty payment.
The interim government recently initiated a move to adjust the BPC's outstanding fuel-oil bills with its payable duty on imported petroleum oils to the National Board of Revenue (NBR).
It has formed a committee, headed by a joint secretary of finance ministry, to facilitate the settlement of the Biman's arrears fuel bills with BPC.
Under the initiative, the relevant agencies held a meeting a couple of months back and asked the NBR and the BPC to settle the import duty payment disputes aiming to facilitate adjustment of the corporation's arrear fuel-oil bills with Biman.
Senior officials from the ministries of finance, power and energy resources, BPC and NBR were present at the meeting.
The meeting had set a two-week timeframe for settling such disputes, but the NBR and the BPC are yet to reach an agreement to this effect, a senior Energy Division official said.
"Although the NBR and the BPC have partially agreed on payment of duties the disputes still remain with respect to a certain amount of duties," said the official.
The BPC, according to the NBR, is liable to pay nearly Tk 22 billion as import duties to the customs department while the former claims to have been entitled to get duty rebate worth more than Tk 5.0 billion from it.
Until such dispute is resolved, the authorities find themselves in a difficult situation to adjust the Biman's arrear fuel bills with NBR in favour of the PBC, said an official.
The official further said the Biman owes the BPC - the state-run petroleum marketing entity - more than Tk 17 billion on account of purchasing fuel on deferred payments.
The official further said the government has taken up the move to settle the arrear bills in order to help the resource-crunch BPC get rid of its huge bank liabilities.
The government recently converted the Biman into a public limited company and renamed as 'The Biman Bangladesh Airlines Limited (BBAL)' to make the national airline operationally sound and commercially viable without settling its huge liabilities.
The Biman could not pay its dues to the BPC mainly because of its financial problems, caused due to its huge operating losses. Official figures showed that the national carrier incurred a loss to the tune of Tk 12 billion in fiscal 2006-07 alone.
The non-settlement of such a big amount of dues by the Biman has caused immense fund crisis to the state-owned BPC, especially for footing its import payment.
Apart from the non-payment of dues by the Biman, the BPC has been incurring huge losses in recent years on account of marketing petroleum at significantly lower than the import prices.
In this backdrop, the BPC's liability with the banks - both local and foreign - continued to rise over the years, sources said.