BPC dependence on govt, donors to continue for oil import
S M Jahangir | Saturday, 12 July 2008
The state-run petroleum oil marketing company BPC will have to turn to both the government and the donors for financing its deficit worth around Tk 100 billion for the current fiscal year, despite the large upward adjustments of fuel oil prices recently, sources said.
'Even after the latest price hike of petroleum oils by the government, the Bangladesh Petroleum Corporation's (BPC) deficit is likely to reach Tk 100 billion, provided the global petroleum prices stay at the present levels,' a senior Energy Division official has told the FE.
The official went on: 'The state-owned BPC will have to depend on both the government and the lending agencies to a greater extent for counterbalancing such a deficit.
According to an official estimate, the latest upward adjustments will help the Corporation raise an additional Tk 70 billion from sale of the petroleum oils in the local market.
On June 30, the government raised the prices of petroleum products by 33.84 per cent to 50 per cent in order to help reduce the losses, sustained by the BPC on account of selling the items at much lower than imported costs.
The prevailing skyrocketing prices of petroleum oils in the global market had prompted the government to readjust their marketing prices at the domestic level, official sources said.
The price of a barrel of crude petroleum oil has already crossed US$ 145 in the international market compared to around $ 65 per barrel more than a year ago.
Even after the price enhancements at the domestic level, the BPC is still to sell the petroleum oils at lower than imported costs, said an Energy Division official.
The Corporation is expected to get around $3.0 billion from sale of petroleum oils for the current fiscal. The amount in the fiscal year 2007-08 was over $ 2.0 billion.
On the other hand, the BPC's total cost for import of petroleum products is likely to be $ 4.5 billion to $ 5.0 billion this fiscal, provided their global prices remain at the present levels, an official sources said.
Apart from the enhanced import cost, the Corporation will also require a significant amount of fund for repayment of its outstanding debts and import bills, officials said.
They also said the BPC has already sought a fund to the tune of Tk 100 billion from the finance ministry in order to foot the Corporation's increased fuel-oil import bills for the current fiscal.
The BPC requires to import around 3.7 million tonnes of petroleum oils annually, the sources mentioned.
'The Energy Division has requested the Ministry of Finance to provide funds on a monthly basis to help the BPC make its repayments and meet other operating costs,' said an official.
Apart from the government's supports, the corporation is looking for additional funding support from the Islamic Development Bank (IDB).
Last fiscal, the BPC received funding support amounting to $ 1.0 billion from the Jeddah-based multilateral donor, an official said, adding that the Bank has already pledged $1.5 billion worth of credit for the current fiscal.
'Even after the latest price hike of petroleum oils by the government, the Bangladesh Petroleum Corporation's (BPC) deficit is likely to reach Tk 100 billion, provided the global petroleum prices stay at the present levels,' a senior Energy Division official has told the FE.
The official went on: 'The state-owned BPC will have to depend on both the government and the lending agencies to a greater extent for counterbalancing such a deficit.
According to an official estimate, the latest upward adjustments will help the Corporation raise an additional Tk 70 billion from sale of the petroleum oils in the local market.
On June 30, the government raised the prices of petroleum products by 33.84 per cent to 50 per cent in order to help reduce the losses, sustained by the BPC on account of selling the items at much lower than imported costs.
The prevailing skyrocketing prices of petroleum oils in the global market had prompted the government to readjust their marketing prices at the domestic level, official sources said.
The price of a barrel of crude petroleum oil has already crossed US$ 145 in the international market compared to around $ 65 per barrel more than a year ago.
Even after the price enhancements at the domestic level, the BPC is still to sell the petroleum oils at lower than imported costs, said an Energy Division official.
The Corporation is expected to get around $3.0 billion from sale of petroleum oils for the current fiscal. The amount in the fiscal year 2007-08 was over $ 2.0 billion.
On the other hand, the BPC's total cost for import of petroleum products is likely to be $ 4.5 billion to $ 5.0 billion this fiscal, provided their global prices remain at the present levels, an official sources said.
Apart from the enhanced import cost, the Corporation will also require a significant amount of fund for repayment of its outstanding debts and import bills, officials said.
They also said the BPC has already sought a fund to the tune of Tk 100 billion from the finance ministry in order to foot the Corporation's increased fuel-oil import bills for the current fiscal.
The BPC requires to import around 3.7 million tonnes of petroleum oils annually, the sources mentioned.
'The Energy Division has requested the Ministry of Finance to provide funds on a monthly basis to help the BPC make its repayments and meet other operating costs,' said an official.
Apart from the government's supports, the corporation is looking for additional funding support from the Islamic Development Bank (IDB).
Last fiscal, the BPC received funding support amounting to $ 1.0 billion from the Jeddah-based multilateral donor, an official said, adding that the Bank has already pledged $1.5 billion worth of credit for the current fiscal.