Unable to turn around
Golam Mostafa Jibon: Bangladesh Petroleum Corporation (BPC) is incurring a daily loss of around Tk 8 crore, which stands at around Tk 240 crore per month due to adverse impact of the ongoing war between Ukraine and Russia. The price of fuel has already broken records in the world market, which is also affecting the country’s market. In this circumstance, the organization can’t turn around anyway that leads to a negative impact on the consumer level.
BPC stakeholders said, fuel prices have already been adjusted to reduce subsidies. The benefit of lower oil prices in the global market is not available due to the devaluation of Taka against the dollar. The depreciation of Tk 10 to Tk 12 against per dollar has caused of increasing the cost of BPC. Due to which the company is still in losses.
ABM Azad, Chairman of BPC said that, “Oil was sold with subsidy from BPC’s own funds for about a year when the price of fuel oil increased in the world market. In this, more than 9,000 crore of subsidy has to be paid out of the money allocated for the project. Currently, the price of fuel oil in the world market has decreased slightly, but due to the devaluation of Taka against the dollar, the cost of importing oil is falling. Due to which BPC is still in losses. However, due to lower oil prices, BPC’s losses have come down a bit, but we are still not loss-free.”
Azad also said, “Now we are losing Tk 4-5 against per liter of diesel, which was a loss of up to Tk 8 to Tk10 per liter even one and a half to two months ago. Now the daily loss of BPC is about Tk 8 crore. But there is no loss in sale of furnace oil, petrol and octane. Diesel sales are still incurring losses since the hike of diesel prices last August.”
BPC Chairman also said, “If BPC is to be kept at ‘break even point’, then the price of refined diesel in the world market should come to 104 dollars per barrel. Refined diesel prices are still around $108-109 per barrel. Meanwhile, many people are demanding to reduce the price of fuel oil in the world market. In this situation, if the price of fuel oil is reduced, then the losses of BPC will increase further.”
The concerned department said that, the loss-making BPC will not be able to turn around. It should be given a chance to turn around. If not, it will be difficult for BPC to cope, if the energy market becomes unstable again in the future.
According to BPC sources, currently the annual demand for fuel oil is 70lakh to 72 lakh metric tons. Of them, the demand for diesel is 48 lakh to 49 lakh metric tons. Now 13,500 metric tons to 14,000 metric tons of diesel is being sold on average daily.
Energy expert Prof. M. Tamim said, “Though, BPC is still making some losses on diesel, there is no justification for reducing the price at the moment. The amount of transport fare increased due to increase in diesel prices, now the transport fares will not decrease even if the prices are reduced slightly. People will not get any benefit from it. It is better for the government to generate income so that it can provide subsidies when the price of fuel rises later.”
He however, said, this money should not be used in other sectors. But the government can reduce the price of octane and petrol, if it wants. According to BPC sources, the loss in the financial year 2020-21 was Tk Tk 5000 crores. Due to the increase in the price of fuel oil in the world market following the impact of Russia-Ukraine war, there has been a loss of more than Tk 9,000 crore since February this year.
Relying on revenue to meet budget deficit Savings certificates, bonds and loans taken from…