Convert Tk 274b oil debt to state subsidy

Bangladesh Petroleum Corporation (BPC) again pleaded for converting its Tk 274 billion oil debt to state subsidy, notwithstanding making hefty profit now on global market slump, officials said.
The energy division last week forwarded a letter of BPC in this regard to the Ministry of Finance (MoF) for consideration 'to help the loss-making body emerge into a profitable one'.
The state-run oil importer had incurred losses since its inception but made a turnaround with some profit in its coffers during the fiscal years (FYs) 1982-83 to 1998-99 bar FY 1996-97. Thereafter, it reverted to incurring losses for having to sell oil at lower prices despite price hike on the international market.
Until FY2013-14, the corporation's total loss had accumulated to Tk 514 billion.
The government on various occasions provided Tk 15 billion in cash and Tk 159.58 billion in the form of bond to bear the responsibility of BPC loan. The rest of the amount worth Tk 274 billion still remained on BPC's back as a load of loan owed to government, the memo says.
Crude-oil prices on the international market took a downturn in FY2014-15 and slumped below $50 per barrel in March 2015 in a deep dive. In a further fall the rate came down to a rock-bottom $29 per barrel in January 2016.
That really gave BPC a scope for bagging a windfall---it began selling oils at much higher prices against the low import prices, starting from FY2014-15.
The memo also mentions that the BPC from its profit meantime has paid back Tk 30.858 billion to Sonali, Janata, Agrani, and Rupali banks, Tk 17 billion to Petrobangla, Tk 6.0 billion to revenue board, and Tk 2.35 billion as land price for Unit-2 of Eastern Refinery Ltd (ERL). Besides, it paid government Tk 10 billion as dividend.
Now it is saving money for funding the setting up of ERL-2, Dhaka-Chittagong pipeline, single-point-mooring project, pipeline from Numaligarh Refinery of India to Parbatipur in Bangladesh and a new oil refinery at Payra seaport.
Since oil price does not remain static on the international market, the petroleum corporation is also planning to create a Tk 50 billion fund for import of fuel oils for sixty days to ensure energy security of the country.
 A senior MoF official told the FE the BPC made the same plea in February this year but the government did not take any concrete decision on it.
He said the BPC had been incurring loss for a long period and the government provided necessary support to keep the corporation afloat. "Since BPC is now making good profit, it should pay back the entire money it took as loan."
The official said decision has to be taken by high-ups of the government regarding the BPC plea as the case involves a big sum of public money.
BPC Chairman Mahmud Reza Khan could not be reached for a comment over telephone.
However, a senior BPC official told the FE the corporation needs a large amount of money for some development works as stated in the letter.
For ensuring energy security the BPC needs to be financially sound and a profitable concern, he observed.
    syful-islam@outlook.com