BPC seeks Tk 7.25b from state coffer to meet deficit

The state-run Bangladesh Petroleum Corporation (BPC) has sought a subsidy of over Tk 7.25 billion from the government to help keep its fuel imports and supplies uninterrupted, officials have said.
The BPC has sought the subsidy while the Biman Bangladesh Airlines owes over Tk 10.0 billion to the former, according to a high official of the BPC.
The country's lone oil importer and distributor buys oil products from the global markets at higher prices than those in the domestic market, leaving the government to give hefty subsidies to meet the gap.
Sources said the BPC was passing hard time due to the fund crisis. The Biman was not settling the outstanding dues despite repeated reminders. It was just dilly-dallying.
On Monday last the BPC sent a letter to the ministry of power, energy and mineral resources seeking the fund. The letter was then sent to the ministry of finance (MoF).
The state entity sought the amount of over Tk 7.25 billion to finance its deficit for the last October-December quarter, the letter mentioned.
The BPC incurred a loss of Tk 8.12 per litre of diesel and Tk 7.68 per litre of kerosene, the letter said.
Bangladesh's demand for fuel is growing sharply as a short supply of natural gas has forced it to turn to the expensive oil-fired power plants to meet the crippling power shortages.
A source quoted the BPC as saying that the domestic prices of diesel and kerosene were still far lower than the rates they had paid to buy them from the global markets.
The BPC deficit was gradually increasing in the absence of adjustment of domestic fuel prices with the prices in international markets, he added.
The government is paying a large amount of subsidy every year because of the mismatch between the domestic and overseas prices of fuel oils.
The government provided Tk 12.53 billion in financial assistance to the BPC on February 06 last. Of the amount, Tk 8.06 billion was disbursed on account of deficit financing for the fiscal years (FYs) from 2008-09 to 2012-13 and Tk 4.46 billion for the July-September period of the current FY.
The government has set the target of fuel subsidy at Tk 28.75 billion in the current fiscal. It has also estimated the demand for fuel at 5.3 million litres, according to the ministry sources.