BPC explains its surplus fund and hike in fuel oil prices

As some media outlets came down hard on Bangladesh Petroleum Corporation for sitting on more than Tk 42,000 crore and thinning consumers’ wallets as the government hiked oil prices disproportionately, the corporation’s boss offered some explanations.   

BPC Chairman ABM Azad on Wednesday said BPC has ongoing projects and once it had incurred huge losses.

As critics said the fuel oil price hike does not seem logical, Azad got a printout of BPC’s audited statement and distributed it among the journalists, at a press conference. The audited statement incorporated accounts for fiscal 2020-21.

He said, “BPC had Tk 42,992.51 crore from FY15 to FY21 and of this amount, the company spent Tk 20,188.71 crore for various development projects, paid profits to the government and taxes to the NBR and made some capital investment. The remaining Tk 22,803.80 crore is in bank accounts.”

Due to hiking in fuel oil prices in international markets, BPC started incurring losses in FY22, he said, adding that during the February-July period, it counted a loss of Tk 5,910.69 crore.

Citing some historic backgrounds, he said, BPC had been incurring losses in 1999-2000 through 2013-14 fiscal years because of imbalances between import costs and sales prices. And, the loss was worth Tk 53,005.16 crore, he said.

Later, the government provided BPC Tk 44,877.47 crore as subsidy. At that time BPC had a deficiency of Tk 8,127.69 crore, explained the chairman.

In its bid to ensure energy security, BPC is implementing projects such as Eastern Refinery unit-2, Single Mooring Point (SPM), Dhaka-Chattogram pipeline, Jet-1 pipelines, India Bangladesh Friendship Pipelines and some five more schemes at an estimated cost of Tk 34,261.57 crore.  Of this, fixed deposits in banks comprise Tk 19,404.72 crore, the BPC boss said.

Besides, the corporation has to have a fund so that it can import fuel oil for any ensuing two months.

Asked, he cited the inventories of all petroleum products stored in the country. He said Bangladesh has a stock of diesel for 30 days, octane for 28 days, petrol for 18 days and jet oil for 32 days, respectively.

He refuted that BPC has a balance of Tk 46,000 crore, as published by some media outlets.

Azad said if prices decline in the international market, the government would cut local prices, too.

The government hiked fuel prices by up to 51.7 percent, the highest in the country’s history on August 5, 2022, adding to the plight of the common people already struggling to cope with the rising cost of living.