BPC seeks approval for US$50m ITFC loan

State-run Bangladesh Petroleum Corporation (BPC) has sought immediate approval for US$ 50 million loan taken out from the International Islamic Trade Finance Corporation (ITFC), a senior BPC official said.
The state-run agency sent a letter to the ministry of power, energy and mineral resources (MoPEMR) last week, seeking loan guarantee, he added.
Quoting an official who is dealing with the issue, he said the loan would be used in importing crude oil for the month of December.
The amount of credit and the rate of interest were fixed at a meeting held at Jeddah of Saudi Arabia on February 02-03, 2015.
The tenure of the loan is six months and the rate of interest is 4.20 per cent annually, according to the BPC data. The ITFC will charge 0.20 per cent interest on the letter of credit (LC) facility from BPC, the data mentioned.
The standing committee on non-concessional loan through MoPEMR approved a loan support worth US$ 1.0 billion from ITFC in May 2015, according to the BPC data.
The BPC has so far received US$ 950 million under the loan term. It had already spent US$ 888 million. And some US$ 62 million have left with the BPC, General Manager (Finance) of the state-run entity Moni Lal Das told the FE on Thursday.
He, however, said ITFC loan will be used in importing crude oil if the finance ministry and the central bank give counter-guarantee and guarantee respectively in favour of the loan as early as possible.
MoPEMR will first seek guarantee for the loan from the Bangladesh Bank (BB). Secondly, the BB will seek counter-guarantee in favour of the loan from the finance ministry, a high official of BPC said.  
In 2013, the BPC borrowed US$ 2.2 billion from the ITFC to meet import costs of petroleum products. The amount was US$ 2.6 billion in 2012.
The BPC's profit was gradually increasing as it was not adjusting the fuel prices in the country to its prices in the international market, sources concerned said.
The government had long been paying a large amount of subsidy every year because of mismatch between the fuel oil procurement prices and the rates at which those were being marketed in the country. However, the cash-strapped corporation was now making profits.
The corporation imported around 5.50 million tonnes of crude oil and refined oil products combined in 2015.
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