BPC unable to clear all duty-taxes despite oil price fall in int'l market
Friday, 11 December 2009
FE Report
Cash-starved Bangladesh Petroleum Corporation (BPC) is still unable to clear all duty-taxes to the revenue exchequer despite significant fall in oil prices in the international market.
The National Board of Revenue (NBR) has outstanding dues worth Tk 4.0 billion (400 crore) with Eastern Refinery Limited, a subsidiary of BPC, against import of crude petroleum oil.
Oil prices in the international market dropped by 50 per cent in the current year as an impact of the global recession. Financial condition of BPC started improving after fall in the oil prices.
The NBR recently sent a letter to the energy ministry requesting it to clear all the outstanding customs duties.
"Customs department has been running with single digit growth, 5.0 per cent, in the current fiscal due to slide in product prices in the international market. It needs to realise all outstanding taxes from other entities to increase revenue collection," said a senior customs official.
BPC cannot pay all arrears due to financial crunch, but volume of outstanding taxes is minimised after decline in oil prices in the global market, he said.
The revenue board had Tk 12 billion dues with the BPC last year that came to Tk 4.0 billion recently, he said.
Responding to the NBR's request, energy ministry has said it will clear all the dues gradually in installments.
"The BPC is still running with financial crisis as it has to pay Tk 7.0 billion annually as bank interest of foreign loans," Energy Secretary Md Mohsin said in a letter to the NBR.
The entity has no working capital. So, BPC has been importing fuel depending on loans from foreign and state-owned banks, he said.
"BPC will need a big chunk of foreign currency for ensuring smooth supply of fuel oil for upcoming Boro season," he wrote in the letter.
The government is yet to readjust local prices of fuel oil with the international market resulting in continuous loss of the BPC, he said.
The situation has improved after price fall in the international market but still it is in financial problem, he added.
Revenue board officials said fuel oil is one of the major import commodities that contribute a big amount to the national exchequer.
Price fluctuation of petroleum products and fuel oil always affects the revenue earning of the customs department, said an official.
Cash-starved Bangladesh Petroleum Corporation (BPC) is still unable to clear all duty-taxes to the revenue exchequer despite significant fall in oil prices in the international market.
The National Board of Revenue (NBR) has outstanding dues worth Tk 4.0 billion (400 crore) with Eastern Refinery Limited, a subsidiary of BPC, against import of crude petroleum oil.
Oil prices in the international market dropped by 50 per cent in the current year as an impact of the global recession. Financial condition of BPC started improving after fall in the oil prices.
The NBR recently sent a letter to the energy ministry requesting it to clear all the outstanding customs duties.
"Customs department has been running with single digit growth, 5.0 per cent, in the current fiscal due to slide in product prices in the international market. It needs to realise all outstanding taxes from other entities to increase revenue collection," said a senior customs official.
BPC cannot pay all arrears due to financial crunch, but volume of outstanding taxes is minimised after decline in oil prices in the global market, he said.
The revenue board had Tk 12 billion dues with the BPC last year that came to Tk 4.0 billion recently, he said.
Responding to the NBR's request, energy ministry has said it will clear all the dues gradually in installments.
"The BPC is still running with financial crisis as it has to pay Tk 7.0 billion annually as bank interest of foreign loans," Energy Secretary Md Mohsin said in a letter to the NBR.
The entity has no working capital. So, BPC has been importing fuel depending on loans from foreign and state-owned banks, he said.
"BPC will need a big chunk of foreign currency for ensuring smooth supply of fuel oil for upcoming Boro season," he wrote in the letter.
The government is yet to readjust local prices of fuel oil with the international market resulting in continuous loss of the BPC, he said.
The situation has improved after price fall in the international market but still it is in financial problem, he added.
Revenue board officials said fuel oil is one of the major import commodities that contribute a big amount to the national exchequer.
Price fluctuation of petroleum products and fuel oil always affects the revenue earning of the customs department, said an official.