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Rising fuel price in global market: BPC runs risk of incurring huge loss

03 Oct 2018, 09:00

NTV Online

State-run Bangladesh Petroleum Corporation (BPC) is in the risk of incurring Tk 6,000 crore to Tk 8000 crore loss in the current fiscal due to rising import prices of the petroleum fuel. 

BPC officials told UNB that they had to import crude oil at $81.51 per barrel in August this year comparing to just $43.17 per barrel in April this year, reports the UNB.

Similarly, the diesel, as refined oil, was imported at $91.70 per barrel which was $50 per barrel in April this year.

‘As a result, currently the government has to incur a loss of Tk 8.90 per lire in diesel and Tk 12.33 per litre in furnace oil’, said a top official at the marketing department of BPC, the state-owned import and marketing entity under Energy Division.

State Minister for Nasrul Hamid said rise in petroleum fuel prices in the world market would create a big burden on the government as more money would be spent on fuel subsidy.

He said this will also create a spillover effect on different sectors including the electricity generation as a huge quantity of petroleum fuel is being imported for power plants.

At present, about 25 percent of 11,000 MW power generations is dependent on petroleum fuel.

‘If upward trend in global fuel market continues, it will affect both power and petroleum sectors. There may be some impact on LNG price as well since its price is linked with petroleum price,’ he told UNB.

The country has to annually import over 5.5 million tons of petroleum fuel while LNG import began recently.

BPC officials, however, said that so far they have not count any loss in selling the other petroleum fuels like octane, petrol, kerosene and jet fuel as most of the products except jet fuel are being produced by locally produced condensate, a byproduct of natural gas.   

They said currently the BPC has to count a loss of over Tk 20 crore in selling of diesel and furnace oil at below the import cost.

‘This loss will go up if rising trend continues in the global market’, said a BPC official preferring anonymity.

He said there is a global prediction that the petroleum price may again cross $100 per barrel.

He also noted that the organisation has to incur loss for dollar rate fluctuation as well since the exchange rate of dollar is on the rising trend.

‘Few months back we had to pay Tk 83.50 against each dollar (USD) which now stands at Tk 83.75’, he said.

BPC officials said that in last few years they hadn’t count any loss in fuel marketing. Rather, in last two to three fiscals, BPC made profits in its fuel business, they said.

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