BPC incurs Tk 10b loss in 4 months
Wednesday, 14 November 2007
M Azizur Rahman
The Energy and Mineral Resources Division (EMRD) has sought Tk 50 billion afresh from the finance ministry to import fuel oil for the current fiscal of 2007-08 against the backdrop of soaring international petroleum prices.
"The EMRD Sunday requested the finance division for allocating the said amount to help the state-owned Bangladesh Petroleum Corporation (BPC) offset its ballooning losses," a senior EMRD official told the FE Tuesday.
He said in the first four months of the current fiscal until October, the BPC has already incurred losses of over Tk 10 billion as the global oil prices kept mounting.
The BPC's monthly loss already exceeds Tk 2.50 billion as the corporation has to import fuel oils at much higher costs while selling those at quite low prices, the difference being subsidised by the government.
"This loss may be even higher next month if the current uptrend in prices of petroleum products continues in the international market," the EMRD official said.
To bail out the state-run corporation from huge debts, the government has planned to absorb the BPC's accumulated loans worth Tk 75.23 billion as its own liability by issuing bonds of equivalent amount.
But the rising prices of petroleum products might push the BPC's liabilities to new heights, a senior BPC official observed.
Sources said petroleum prices are now hovering around US$ 100 a barrel in the international market, up by $33 a barrel compared to the prices in April when the government last increased the domestic petroleum prices.
"Despite April's hike in petroleum prices, the BPC is now counting losses of over Tk 20 per litre for diesel and Tk 21 per litre for kerosene," he said.
Energy officials said a fresh hike is essential, but the government, concerned with the rising inflation and price hike of essentials, is keeping the decision on hold for now.
They said the BPC is now bearing the brunt of the volatile global market as the government is neither adjusting the prices with the international market nor giving commitment for subsidy.
After repeated attempts the government recently arranged loans worth $ 300 million from three nationalised commercial banks (NCBs) -- Janata, Sonali and Agrani, to enable BPC to continue its import.
In a bid to adjust the domestic oil prices with those in the international market the government several months ago constituted an eight-member permanent fuel oil price fixation committee to monitor oil prices in the international market and accordingly adjust local prices.
But the committee is yet to meet for discussing the price hike in the international market, the sources pointed out.
In the latest hike in April 2007, the government raised the prices of petroleum products between 15 per cent and 21 per cent aiming to offset the impact of overheated international oil market on the domestic economy.
As per the latest price adjustment, the price of octane is now Tk 67 per litre and petrol Tk 65 per litre, while that of both diesel and kerosene is Tk 40.
The Energy and Mineral Resources Division (EMRD) has sought Tk 50 billion afresh from the finance ministry to import fuel oil for the current fiscal of 2007-08 against the backdrop of soaring international petroleum prices.
"The EMRD Sunday requested the finance division for allocating the said amount to help the state-owned Bangladesh Petroleum Corporation (BPC) offset its ballooning losses," a senior EMRD official told the FE Tuesday.
He said in the first four months of the current fiscal until October, the BPC has already incurred losses of over Tk 10 billion as the global oil prices kept mounting.
The BPC's monthly loss already exceeds Tk 2.50 billion as the corporation has to import fuel oils at much higher costs while selling those at quite low prices, the difference being subsidised by the government.
"This loss may be even higher next month if the current uptrend in prices of petroleum products continues in the international market," the EMRD official said.
To bail out the state-run corporation from huge debts, the government has planned to absorb the BPC's accumulated loans worth Tk 75.23 billion as its own liability by issuing bonds of equivalent amount.
But the rising prices of petroleum products might push the BPC's liabilities to new heights, a senior BPC official observed.
Sources said petroleum prices are now hovering around US$ 100 a barrel in the international market, up by $33 a barrel compared to the prices in April when the government last increased the domestic petroleum prices.
"Despite April's hike in petroleum prices, the BPC is now counting losses of over Tk 20 per litre for diesel and Tk 21 per litre for kerosene," he said.
Energy officials said a fresh hike is essential, but the government, concerned with the rising inflation and price hike of essentials, is keeping the decision on hold for now.
They said the BPC is now bearing the brunt of the volatile global market as the government is neither adjusting the prices with the international market nor giving commitment for subsidy.
After repeated attempts the government recently arranged loans worth $ 300 million from three nationalised commercial banks (NCBs) -- Janata, Sonali and Agrani, to enable BPC to continue its import.
In a bid to adjust the domestic oil prices with those in the international market the government several months ago constituted an eight-member permanent fuel oil price fixation committee to monitor oil prices in the international market and accordingly adjust local prices.
But the committee is yet to meet for discussing the price hike in the international market, the sources pointed out.
In the latest hike in April 2007, the government raised the prices of petroleum products between 15 per cent and 21 per cent aiming to offset the impact of overheated international oil market on the domestic economy.
As per the latest price adjustment, the price of octane is now Tk 67 per litre and petrol Tk 65 per litre, while that of both diesel and kerosene is Tk 40.