Proposal to double govt guarantee against bank loan to BPC mooted
Shakhawat Hossain | Wednesday, 30 July 2008
The amount of bank loan to the Bangladesh Petroleum Corporation (BPC) for which the government will stand as guarantor is likely to be doubled to Tk 85.00 billion.
A proposal drafted by the energy division in this connection is now awaiting approval by finance and planning adviser Mirza Azizul Islam, according to sources.
The energy ministry made the recommendation to raise guarantee-limit in favour of the state-owned commercial banks through which Bangladesh Petroleum Corporation (BPC) make payments against fuel oil imports.
As per new limit the amount of the government guarantee will be Tk 30.00 billion each for Agrani Bank Ltd and Sonali Bank Ltd and Tk 25.00 billion for Janata Bank Ltd, said a senior finance ministry official.
The previous guarantee limit for Agrani was only Tk 7.50 billion.
An energy ministry official said it will be difficult for the BPC to maintain smooth oil import without raising the guarantee limit for bank loans.
Sources said the newly introduced policies by the Kuwait Petroleum Corporation (KPC) have necessitated the raising of the government's guarantee limit.
The KPC, which is the country's main source of import for the entire volume of refined petroleum oils of about 2.5 million tonnes, asked volume of the BPC in April last to clear import payments at least ten days before shipment.
Earlier, the BPC used to make import payments only after sending the oil consignment to Chittagong port, said the official.
The official said the new payment rule and the soaring oil prices in the first half of the current year have made it mandatory for the country to increase the guarantee limit to 36 per cent from the existing 15 per cent.
The country's fuel oils import bills has been estimated at over US $3.0 billion in the just concluded fiscal year due to nearly 100 per cent jump in oils prices in the international market.
In the previous fiscal, the country's oil import bills stood at $ 2.03 billion.
The BPC has long been facing problem in meeting the oil import bills because of severe liquidity crisis.
The government provided Tk 70.00 billion subsidy to the BPC last fiscal and also has kept aside Tk 60.00 billion subsidy in the budget for the current fiscal year.
A proposal drafted by the energy division in this connection is now awaiting approval by finance and planning adviser Mirza Azizul Islam, according to sources.
The energy ministry made the recommendation to raise guarantee-limit in favour of the state-owned commercial banks through which Bangladesh Petroleum Corporation (BPC) make payments against fuel oil imports.
As per new limit the amount of the government guarantee will be Tk 30.00 billion each for Agrani Bank Ltd and Sonali Bank Ltd and Tk 25.00 billion for Janata Bank Ltd, said a senior finance ministry official.
The previous guarantee limit for Agrani was only Tk 7.50 billion.
An energy ministry official said it will be difficult for the BPC to maintain smooth oil import without raising the guarantee limit for bank loans.
Sources said the newly introduced policies by the Kuwait Petroleum Corporation (KPC) have necessitated the raising of the government's guarantee limit.
The KPC, which is the country's main source of import for the entire volume of refined petroleum oils of about 2.5 million tonnes, asked volume of the BPC in April last to clear import payments at least ten days before shipment.
Earlier, the BPC used to make import payments only after sending the oil consignment to Chittagong port, said the official.
The official said the new payment rule and the soaring oil prices in the first half of the current year have made it mandatory for the country to increase the guarantee limit to 36 per cent from the existing 15 per cent.
The country's fuel oils import bills has been estimated at over US $3.0 billion in the just concluded fiscal year due to nearly 100 per cent jump in oils prices in the international market.
In the previous fiscal, the country's oil import bills stood at $ 2.03 billion.
The BPC has long been facing problem in meeting the oil import bills because of severe liquidity crisis.
The government provided Tk 70.00 billion subsidy to the BPC last fiscal and also has kept aside Tk 60.00 billion subsidy in the budget for the current fiscal year.