BPC losses in diesel, kerosene decline by 300pc since June
Wednesday, 17 September 2008
FE Report
State-owned Bangladesh Petroleum Corporation (BPC)'s losses in diesel and kerosene have declined by more than 300 per cent after the dramatic fall of global oil prices since their historic high in July, its chairman said Tuesday.
Anwarul Karim said his corporation was now losing Tk 12 per litre in kerosene and Tk 11.50 per litre in diesel as the prices of crude oil plunged from a record US$147 per barrel on July 11 to $93 in the world market on Tuesday.
"We had been losing of Tk 50 per litre of kerosene and diesel in June, weeks before the oil prices were adjusted by the government. It came down to Tk35 per litre after the price hike in July," Karim said.
Diesel and kerosene make up more than 80 per cent of the country's total oil consumption and over 95 per cent of BPC's annual losses. The government subsidises the fuels, as they are mainly used in farming, rural transportation and cooking.
The corporation has also started making profit in octane and petroleum, after the prices of refined oil tapered off following sharp decline in global crude oil rates, he said.
His comments came after the finance and planning adviser Mirza Azizul Islam told reporters at the weekend that the government would consider cutting domestic oil prices if the falling trend continues in the global market.
Energy ministry officials said they were already working out ways to cut oil prices, as the BPC's loss was now expected to fall far short of the revised projection of Tk60 billion in the 2008-9 fiscal year.
The BPC had projected more than Tk 170 billion loss for 2008-9 fiscal in June, weeks before the oil prices were hiked between 34 and 67 per cent. It lowered the amount to around Tk 110 billion after the hike on July 1.
But with oil prices declining fast in the world market amid worries over the health of global economy, the BPC revised the projection again to Tk 60 billion, almost equal to the amount it lost in the 2007-8 fiscal year.
"We think our annual losses would drop further as global oil prices were tumbling every day," Karim said, adding already his corporation's losses have fallen to Tk 5.00 billion in August from Tk 5.5 billion in July this year.
Global oil experts said the prices would sink further as the world's top economies are flirting with recession while the chances of major conflicts in the major oil producing nations look remote.
The BPC chairman said his company would break-even on diesel and kerosene if the imported prices of refined oil decline to $99-100 a barrel from their existing rate of $118.60 per barrel.
Bangladesh last year spent around three billion dollars --- up around one billion from the previous year --- to import 3.7 million tonnes of oil including 2.3 million tonnes of diesel, 450,000 tonnes of kerosene and around 150,000 tonnes of petroleum and octane.
The BPC sees no major change in the consumption pattern despite increasing number of cars and motor vehicles have been converting into compressed natural gas (CNG)-run ones.
State-owned Bangladesh Petroleum Corporation (BPC)'s losses in diesel and kerosene have declined by more than 300 per cent after the dramatic fall of global oil prices since their historic high in July, its chairman said Tuesday.
Anwarul Karim said his corporation was now losing Tk 12 per litre in kerosene and Tk 11.50 per litre in diesel as the prices of crude oil plunged from a record US$147 per barrel on July 11 to $93 in the world market on Tuesday.
"We had been losing of Tk 50 per litre of kerosene and diesel in June, weeks before the oil prices were adjusted by the government. It came down to Tk35 per litre after the price hike in July," Karim said.
Diesel and kerosene make up more than 80 per cent of the country's total oil consumption and over 95 per cent of BPC's annual losses. The government subsidises the fuels, as they are mainly used in farming, rural transportation and cooking.
The corporation has also started making profit in octane and petroleum, after the prices of refined oil tapered off following sharp decline in global crude oil rates, he said.
His comments came after the finance and planning adviser Mirza Azizul Islam told reporters at the weekend that the government would consider cutting domestic oil prices if the falling trend continues in the global market.
Energy ministry officials said they were already working out ways to cut oil prices, as the BPC's loss was now expected to fall far short of the revised projection of Tk60 billion in the 2008-9 fiscal year.
The BPC had projected more than Tk 170 billion loss for 2008-9 fiscal in June, weeks before the oil prices were hiked between 34 and 67 per cent. It lowered the amount to around Tk 110 billion after the hike on July 1.
But with oil prices declining fast in the world market amid worries over the health of global economy, the BPC revised the projection again to Tk 60 billion, almost equal to the amount it lost in the 2007-8 fiscal year.
"We think our annual losses would drop further as global oil prices were tumbling every day," Karim said, adding already his corporation's losses have fallen to Tk 5.00 billion in August from Tk 5.5 billion in July this year.
Global oil experts said the prices would sink further as the world's top economies are flirting with recession while the chances of major conflicts in the major oil producing nations look remote.
The BPC chairman said his company would break-even on diesel and kerosene if the imported prices of refined oil decline to $99-100 a barrel from their existing rate of $118.60 per barrel.
Bangladesh last year spent around three billion dollars --- up around one billion from the previous year --- to import 3.7 million tonnes of oil including 2.3 million tonnes of diesel, 450,000 tonnes of kerosene and around 150,000 tonnes of petroleum and octane.
The BPC sees no major change in the consumption pattern despite increasing number of cars and motor vehicles have been converting into compressed natural gas (CNG)-run ones.