Petroleum Corporation incurs loss Tk 20 per liter of diesel

Impact of war

Mahfuja Mukul: If the price of refined diesel in the international market is less than $ 60 per barrel, Bangladesh Petroleum Corporation (BPC) does not have to pay any loss. But last week the price of that diesel rose to $134 per barrel. However, despite a slight drop in prices on Sunday, at present the loss is up to Tk 20 per liter, according to senior BPC officials.
However, despite the BPC subsidy, the government is not considering raising diesel prices at this stage, according to the Department of Energy and Mineral Resources.
Concerned parties say the Russia-Ukraine war has affected the energy and transportation systems. That is why the prices of all types of fuels including diesel have gone up in the international market.
Additional Secretary of the Department of Energy and Mineral Resources (Operations) said. Jahangir Alam told that BPC controls the price of diesel. So far, however, there has been no discussion or decision on raising prices.
According to BPC sources, the country has an annual demand of about 6 million metric tons of fuel oil. Of this, 1.5 million metric tons of crude oil (crude oil) was refined at the Eastern Refinery. BPC imported the remaining 4.5 million tons of refined fuel oil.
Diesel accounts for more than 83% of the fuel oil used in Bangladesh. Diesel is used in various fields including road and shipping, agricultural irrigation pumps and several power plants. At present, state-owned companies Padma Oil, Meghna Petroleum and Jamuna Oil Company sell diesel at Tk 80 per liter.
Talking to the concerned officials of BPC, it was learned that with the five-day average price of diesel in the international market, the premium is $2.73 per barrel, import tax (VAT-tax match), port cost, company commission, transportation cost, operation and handling loss. The selling price of diesel is calculated along with other losses. BPC does not have an account of the amount of subsidy or loss due to non-specification of operation and handling loss information.
According to BPC, the price of fuel oil has been rising since mid-2021. Especially at this time the subsidy on diesel has increased. As a result, the price of diesel and kerosene has been increased from Tk 15 per liter to Tk 60 from November 4 of that year by the Department of Energy and Mineral Resources. At that time the price of refined diesel in the international market was around $100 per barrel. However, later in November last year (2021) diesel prices fell.
At the end of November, the price of diesel was between $63-65 per barrel. Later the price of fuel goes up again.
Meanwhile, after Russia’s military operation in Ukraine began on February 24, fuel prices continued to rise in the international market. Diesel prices rose to $ 134 a barrel last week.
On condition of anonymity, a BPC official said that if the price of diesel in the international market is $60 per barrel, BPC does not have to pay any subsidy. But now the price of fuel in the international market is skyrocketing. Although prices have risen since before the Russia-Ukraine war, they have risen sharply since the war began. This has also increased the amount of subsidy on fuel sales.
About three-quarters of the fuel supplied by BPC is diesel. That is why the amount of loss is also high. If the war situation does not end, there is no hope of reducing fuel prices.
BPC General Manager (Finance) Manilal Das told that the rate at which the price of diesel has gone up now shows that BPC has to pay a loss of Tk 20 per liter of diesel sales.