Volatile oil prices cost BPC Tk 1.5b in May
Saturday, 16 June 2007
M Azizur Rahman
The Bangladesh Petroleum Corporation (BPC) incurred a financial loss of over Tk 1.50 billion last month following soaring petroleum prices in the international market.
"The loss may be even bigger next month if the current uptrend in prices of petroleum products continues in the international market," Energy and Mineral Resources Division (EMRD) Secretary AMM Nasir Uddin told the FE.
To bail out the state-run corporation from huge debts, the government has planned to assume the BPC's accumulated loans worth Tk 75.23 billion as its own liability by issuing bonds of equivalent amount.
But the rising prices of petroleum products might push the BPC's liabilities into a new height, a senior BPC official feared.
Sources said petroleum prices are now hovering around US$ 70 a barrel in the international market, up by $12 a barrel compared to the prices in April when the government increased the petroleum prices.
A senior EMRD official said the BPC is now bearing the brunt of the volatile international market as the corporation has to import fuels at international prices and sell those at the fixed and subsidised government rate.
"Despite April's hike in petroleum prices, the BPC is now counting loss of over Tk 12 per litre for diesel," he said.
The official said the BPC incurred Tk 2 loss per litre in April when the petroleum prices were re-fixed by the government.
Though the BPC earns profit of nearly Tk 6 per litre by selling petrol and octane, it is not enough to compensate for the loss it incurs on account of diesel, he added.
The eight-member permanent fuel oil price fixation committee formed to monitor oil prices in the international market and adjust prices in the local market is yet to meet for discussing the price hike in the international market.
In April, the government raised the prices of petroleum products between 15 per cent and 21 per cent aiming to offset the impact of overheated international oil market on the domestic economy.
As per the latest price adjustment, the price of octane is now Tk 67 per litre, petrol Tk 65 per litre, while that of both diesel and kerosene is Tk 40.
The Bangladesh Petroleum Corporation (BPC) incurred a financial loss of over Tk 1.50 billion last month following soaring petroleum prices in the international market.
"The loss may be even bigger next month if the current uptrend in prices of petroleum products continues in the international market," Energy and Mineral Resources Division (EMRD) Secretary AMM Nasir Uddin told the FE.
To bail out the state-run corporation from huge debts, the government has planned to assume the BPC's accumulated loans worth Tk 75.23 billion as its own liability by issuing bonds of equivalent amount.
But the rising prices of petroleum products might push the BPC's liabilities into a new height, a senior BPC official feared.
Sources said petroleum prices are now hovering around US$ 70 a barrel in the international market, up by $12 a barrel compared to the prices in April when the government increased the petroleum prices.
A senior EMRD official said the BPC is now bearing the brunt of the volatile international market as the corporation has to import fuels at international prices and sell those at the fixed and subsidised government rate.
"Despite April's hike in petroleum prices, the BPC is now counting loss of over Tk 12 per litre for diesel," he said.
The official said the BPC incurred Tk 2 loss per litre in April when the petroleum prices were re-fixed by the government.
Though the BPC earns profit of nearly Tk 6 per litre by selling petrol and octane, it is not enough to compensate for the loss it incurs on account of diesel, he added.
The eight-member permanent fuel oil price fixation committee formed to monitor oil prices in the international market and adjust prices in the local market is yet to meet for discussing the price hike in the international market.
In April, the government raised the prices of petroleum products between 15 per cent and 21 per cent aiming to offset the impact of overheated international oil market on the domestic economy.
As per the latest price adjustment, the price of octane is now Tk 67 per litre, petrol Tk 65 per litre, while that of both diesel and kerosene is Tk 40.