Major boost for BPC to meet fuel import costs

The government has provided a loan of Tk 4,500 crore to Bangladesh Petroleum Corporation (BPC) to meet the cost of importing petroleum products and related expenses amid global fuel crisis, officials said on Wednesday.

BPC Chairman Dr Md Rafiqul Islam informed that the corporation received the amount as it sought Tk 5,000 crore as loan from the government, reports BSS.

He said the said a sharp rise in prices of petroleum and its transportation and handling costs exposed the state-run corporation to a significant financial pressure in recent months.

BPC needed the fresh government loan to meet its fuel import financing requirements, maintain uninterrupted supply of petroleum products and enhance its capacity to open letters of credit (LCs) for imports.

BPC incurred an additional cost of around Tk 23,000 crore due to higher international fuel prices and increased transportation costs between March and August this year.

Rafiqul Islam said freight charges for transporting fuel by vessel, which previously ranged between US$3 and $4 per barrel, rose to $15-$17 per barrel, substantially increasing BPC’s monthly import expenses.

The government, meanwhile, raised the prices of diesel and other petroleum products on September 20 to cope with the impact of higher international prices and increased import costs.

BPC earlier said the failure to adjust domestic fuel prices in line with rising international market prices mounted its financial pressure.

According to the corporation officials, it incurred a loss of around Tk 22,876 crore in settling payments for imported fuel between March and August this year.