Tk 5b sanctioned for cash-strapped BPC
Shakhawat Hossain | Friday, 27 June 2008
The finance ministry sanctioned Thursday Tk 5.0 billion for the cash-strapped state-owned Bangladesh Petroleum Corporation (BPC) that faces a record business loss worth Tk 10.08 billion next month due to higher payment liability, officials said.
The amount has been released to the BPC following its plea for allocation of more than Tk 10.0 billion, said a senior energy division official.
"The finance ministry is just providing half of the required amount," said the official.
The BPC earlier sought the fund to pay for eight refined oil and one crude oil consignments worth Tk 26.99 billion to maintain uninterrupted oil supply.
Besides, the BPC has to arrange another Tk 10.0 billion for loan repayments to Bangladesh Bank (BB), Islamic Development Bank (IDB) and others.
The amount will be Tk 3.95 billion for the BB and Tk 4.44 billion for the IDB.
The income and available funding sources for oil import during July will be Tk 26.17 billion, leaving the BPC with high payment shortfall. These include Tk 15.0 billion from sales of petroleum products in the local market and Tk 10.41 loan from Islamic Trade and Finance Corporation (ITFC), a newly created wing under the IDB.
The energy division official said the finance ministry has to provide the money to the BPC to help reduce the widening gap between its import cost and income from sales.
The BPC is selling petroleum products in the local market at a rate lower than imported prices.
The present interim government last made upward price adjustment of fuel oils in April 2007 when the price of per barrel crude oil was US $ 64 to $67 in the international market.
The price of per barrel crude oil is now hovering around $140 in the international market.
With the latest amount, the finance ministry has already paid nearly Tk 70.0 billion to the BPC in the outgoing fiscal. Almost half of the amount was released in the form of subsidy and the rest through other budgetary supports.
The government has earmarked Tk 61.06 billion or 6.11 per cent of the new fiscal budget as oil subsidy. The amount is also 1.0 per cent of the Gross Domestic Product (GDP).
The amount has been released to the BPC following its plea for allocation of more than Tk 10.0 billion, said a senior energy division official.
"The finance ministry is just providing half of the required amount," said the official.
The BPC earlier sought the fund to pay for eight refined oil and one crude oil consignments worth Tk 26.99 billion to maintain uninterrupted oil supply.
Besides, the BPC has to arrange another Tk 10.0 billion for loan repayments to Bangladesh Bank (BB), Islamic Development Bank (IDB) and others.
The amount will be Tk 3.95 billion for the BB and Tk 4.44 billion for the IDB.
The income and available funding sources for oil import during July will be Tk 26.17 billion, leaving the BPC with high payment shortfall. These include Tk 15.0 billion from sales of petroleum products in the local market and Tk 10.41 loan from Islamic Trade and Finance Corporation (ITFC), a newly created wing under the IDB.
The energy division official said the finance ministry has to provide the money to the BPC to help reduce the widening gap between its import cost and income from sales.
The BPC is selling petroleum products in the local market at a rate lower than imported prices.
The present interim government last made upward price adjustment of fuel oils in April 2007 when the price of per barrel crude oil was US $ 64 to $67 in the international market.
The price of per barrel crude oil is now hovering around $140 in the international market.
With the latest amount, the finance ministry has already paid nearly Tk 70.0 billion to the BPC in the outgoing fiscal. Almost half of the amount was released in the form of subsidy and the rest through other budgetary supports.
The government has earmarked Tk 61.06 billion or 6.11 per cent of the new fiscal budget as oil subsidy. The amount is also 1.0 per cent of the Gross Domestic Product (GDP).