Subsidy to BPC may decline by Tk 11b
Sunday, 2 November 2008
S M Jahangir
A drastic fall in the global prices of petroleum oils is set to help the government curtail its budgetary allocation by over Tk 11 billion for financing operating losses of the state-run petroleum marketing agency - BPC, sources said.
According to a highly-placed source, the government is likely to provide about Tk 29-billion worth of subsidy to the Bangladesh Petroleum Corporation (BPC) for the fiscal year (FY) 2008-09 against the allocation of Tk 40 billion.
The BPC received funding support amounting to Tk 70-billion from the government in the FY 2007-08 to help offset its overall operating losses, official sources said.
"The government has already provided subsidy to the tune of Tk 14 billion to the BPC for the first quarter of the current fiscal and an estimated Tk 15 billion worth of more fund is to be provided to the Corporation by the end of this fiscal," said an official.
The BPC's operating loss is expected to come down significantly if the global fuel prices maintain at least their current level.
The price of crude oil has dramatically declined to about US$ 62 a barrel in the world market from a record $ 147 per barrel in July last following a fall in its demand caused mainly due to the global financial turmoil.
Such a drastic fall in the global prices of petroleum products will not only reduce the BPC's import bills, but it will also help offset its overall operating losses to a great extent.
A senior Energy Division official said, "Even after the latest downward adjustment of fuel prices at the domestic level, the BPC's balance-sheet is expected to reach a comfortable level in the months ahead, provided the current declining trend in the global fuel prices persists."
The government lowered the domestic prices of fuel oils by nearly 11.73 per cent on an average from last Sunday midnight in line with the declining trend in the global petroleum prices.
On the other hand, the government increased the local fuel oil prices by 35 per cent to 50 per cent in last July 1, which helped the Corporation raise an additional Tk 70 billion through receipts from sale.
A drastic fall in the global prices of petroleum oils is set to help the government curtail its budgetary allocation by over Tk 11 billion for financing operating losses of the state-run petroleum marketing agency - BPC, sources said.
According to a highly-placed source, the government is likely to provide about Tk 29-billion worth of subsidy to the Bangladesh Petroleum Corporation (BPC) for the fiscal year (FY) 2008-09 against the allocation of Tk 40 billion.
The BPC received funding support amounting to Tk 70-billion from the government in the FY 2007-08 to help offset its overall operating losses, official sources said.
"The government has already provided subsidy to the tune of Tk 14 billion to the BPC for the first quarter of the current fiscal and an estimated Tk 15 billion worth of more fund is to be provided to the Corporation by the end of this fiscal," said an official.
The BPC's operating loss is expected to come down significantly if the global fuel prices maintain at least their current level.
The price of crude oil has dramatically declined to about US$ 62 a barrel in the world market from a record $ 147 per barrel in July last following a fall in its demand caused mainly due to the global financial turmoil.
Such a drastic fall in the global prices of petroleum products will not only reduce the BPC's import bills, but it will also help offset its overall operating losses to a great extent.
A senior Energy Division official said, "Even after the latest downward adjustment of fuel prices at the domestic level, the BPC's balance-sheet is expected to reach a comfortable level in the months ahead, provided the current declining trend in the global fuel prices persists."
The government lowered the domestic prices of fuel oils by nearly 11.73 per cent on an average from last Sunday midnight in line with the declining trend in the global petroleum prices.
On the other hand, the government increased the local fuel oil prices by 35 per cent to 50 per cent in last July 1, which helped the Corporation raise an additional Tk 70 billion through receipts from sale.