Three state-run oil companies are expecting to see a significant jump in its revenue income during the period of March-June as the government has revised up sales margin.
The sales margin of diesel and kerosene rose 60 per cent to Tk 0.80 per litre while the margin of octane and petrol went 50 per cent higher to Tk 0.90 per litre, according to a gazette notification bringing the changes into effect from March 8.
The revenue income of state-run oil companies -- Padma Oil, Jamuna Oil, and Meghna Petroleum - is mainly derived from the margin of sales conducted on behalf of the Bangladesh Petroleum Corporation (BPC).
Representatives of the companies said the decision had been taken in response to their long-standing demand for a hike in the margin as their revenue expenditures had spiked.
Preferring anonymity, a senior official of the BPC said additional sales margin offered to the oil companies would come from the profit margin of the BPC.
Taking into account the amount of oil that these companies sell on a regular basis, they have presumed a growth in sales revenue by Tk 150 million to Tk 190 million for March-June this year.
As a result, the companies will experience a profit growth in FY24.
Asif Khan, chairman of EDGE Asset Management, said the costs of the state-run companies were almost fixed.
Hence, the boost to sales margin will result in a boost to companies' earnings.
Padma Oil said it was looking forward to an increase in revenue by Tk 180 million in FY24 for the additional income during March-June.
Company secretary Ali Absar said they had determined additional gross earnings on petroleum products considering the amount of fuel that can be sold in the four months to June.
"This will drive up the company's bottom line growth for FY24," said Mr. Absar.
He said the oil companies would get the advantage of higher sales margin in the next fiscal year as well.
Padma Oil witnessed a steady growth in profit for the last three fiscal years.
Meghna Petroleum has estimated that it would achieve an additional income of Tk 190 million between March and June of this fiscal year, according to a disclosure posted on the website of the Dhaka Stock Exchange (DSE).
It reported a profit of Tk 4.42 billion for FY23.
Jamuna Oil has not disclosed any prediction about income rise from increased sales margin.
Md. Masudul Islam, company secretary of Jamuna Oil, said their sales revenue was comparatively lower than that of Padma Oil and Meghna Petroleum.
"It's difficult to assess the amount of sales for this fiscal year as private companies are also competing with us [in oil distribution]."
He, however, said Jamuna Oil might see its revenue up by Tk 150 million during March-June.
The year-on-year profit of Jamuna Oil declined marginally in FY22 and later jumped 83 per cent to Tk 3.41 billion in FY23.
Apart from the revenue earned from the sales margin, the oil companies have finance income and other non-operating incomes.
The finance income comes from FDRs (fixed deposit receipt). The organisations also get deposit income as payables to the government remain in their bank accounts often for months in a business cycle before being transferred to the accounts of the relevant state authorities.
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