March 29, 2024, 6:17 pm


Shamim Jahangir

Published:
2022-07-20 19:42:23 BdST

BPC suffers record Tk 25bn loss in June


* Only Tk 1.74bn loss incurred in Feb

* PetroChina suspends fuel supply for delayed payment

* Govt plant to borrow $1.3bn from ITFC, Standard Chartered to pay fuel bills

* Costly imports may cause hikes in power, fuel prices

The loss incurred by state-owned Bangladesh Petroleum Corporation (BPC) jumped by 1349 percent to Tk 25.25 billion in June only due to soaring fuel prices in the international market.

The amount of loss was only Tk 1.74 billion in February.   

The recent spike in the loss caused by the sale of fuel at lower than the import cost has pushed BPC to delay the payment to its suppliers by 10-17 days.

Due to the delay in payment, Chinese supplier PetroChina has suspended its fuel supply to BPC for the next six months starting from July. Other suppliers have also expressed disappointment.

The Energy and Mineral Resources Division (EMRD) informed the Prime Minister’s Office (PMO) about the losses at a review meeting on the power and energy supply situation on Monday.

Prime Minister’s Principal Secretary Dr Ahmad Kaikaus chaired the meeting, which was also attended by Prime Minister’s Energy Adviser Dr Tawfiq-e-Elahi Chowdhury, State Minister for Power and Energy Nasrul Hamid, Power and Energy Secretaries, BPC chairman and other senior officials.

EMRD officials told the meeting that the loss stands at Tk 63.92 billion between February and June this year.

According to BPC sources, the BPC will need to open 15-16 LCs each month at a cost of $40 million. It means Bangladesh requires $7.68 billion to meet the local demand for around 6.5 million tonnes of imported fuel per year at the current market rates.

Diesel price at 84.64 per litre pushes BPC to a breakeven point, but the rate soared to Tk 90.89 a litre now.

The BPC has sought speedy approval to borrow $1 billion from the Islamic Trade and Finance Corporation (ITFC) and another $300 million from Standard Chartered Bank as hard-term loans, sources confirmed.

The government has already decided to cut fuel consumption by 20 percent and suspended diesel-fired electricity generation to save its foreign currency reserves which dropped below $40 billion. 

The soaring fuel prices may cause tariff hikes of electricity and fuel, officials sources said. 

Last month, State Minister for Power Nasrul Hamid said “We have no other alternative to adjusting the fuel tariff every six months as we are facing Tk 54.29 loss on diesel sale and Tk 34 loss on octane sale per litre.”

The country is now consuming 17,790,000 litres of diesel per day. Each barrel of diesel cost $172.50 last month. 

BPC’s bank deposit came down to below Tk 200 billion due to the loss the state agency is incurring for selling fuel at a lower price.

The finance division has recently allocated Tk 10 billion and asked the state agency to mobilize funds from international sources, sources said.

Energy expert Prof M Tamim said Tk 25.25 billion loss incurred due to costly fuel import was too high.

“I hope the loss will come down this month as the government has decided to cut its fuel import by 20 percent and introduce load shedding of electricity,” he said.

He added the international prediction suggest that fuel price will come down in the next few months.

“I don’t think it will be a wise decision to adjust the fuel and power tariffs after all these austerity measures are being planned.”

“It may cause a further hike in inflation,” he warned.

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