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Download PDF The Energy Division has requested the finance ministry to arrange a loan of $900 million for Bangladesh Petroleum Corporation (BPC) as it is going through huge financial losses due to under-pricing of imported petroleum products.
The loan request came following the corporation’s failed effort to get $500 million from Bangladesh Bank (BB). The central bank refused to provide the amount, saying the BPC has already got $300 million loans in the current fiscal year and any new loan would create a pressure on the foreign exchange reserve.
Sources said BPC, the government-owned monopoly in importing petroleum products, incurred a loss of Tk 3,000 crore in July-December period of the current fiscal year.
“We are now putting emphasis on using foreign currency for food and fertiliser imports,” said a BB official. “If we provide such huge loans to the BPC, it may create a crisis of foreign currency in the market,” he added.
Energy and Mineral Resources Secretary Mohammad Mohsin told The Daily Star that the BPC’s estimated loss in the current fiscal year will be about Tk 6,000 crore because the government has not adjusted the prices of petroleum products despite increase of prices on the international market during the last few months.
Sources in the division said usually it requires $2.1 billion in a fiscal year to import petroleum products. But in the current fiscal year, the requirement would reach at least $3.2 billion because of the high fuel prices on the international market.
The BPC is expecting $1.2 billion as loans from the Islamic Development Bank, sources said, adding that the corporation would get another $800-900 million after selling the imported products.
“In such a situation, we need further funding and that is why we asked the government high ups for actions,” said a BPC high official.
Meanwhile, Standard Chartered Bank and BNP Paribas (Banque Nationale de Paris), a French bank, have urged the government to provide loans to the BPC.
The BNP Paribas gave a proposal to provide $200-300 million and the Standard Chartered Bank $250-300 million loans under the London Interbank Offered Rate in addition to 1.84 percent interest.
“The finance ministry is now scrutinising the proposals and future implications of such loans from international banks,” said a source, adding that the decision on the proposals would be taken soon.
Sources said the current loss of BPC is Tk 24 per litre diesel and Tk 23 per litre kerosene as it sells the products at a price fixed by the government which is lower than the international market rate.
“The total estimated loss in diesel and kerosene will be around Tk 8,600 crore in the current fiscal year,” a BPC official said.
He said the BPC made a little profit only by selling octane and petrol. “But the amounts of octane and petrol sold are much less those that of diesel and kerosene,” he said.
As of January 31, BPC’s liabilities stood at $512 million to the Islamic Development Bank, $300 million to Bangladesh Bank and another Tk 3,061 crore to the state-owned commercial banks.
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