Anisul Islam Noor :
The Ministry of Finance has asked Bangladesh Petroleum Corporation (BPC) to return Tk 2,630 crore which was provided to it as support for importing fuel oil in the last 14 years, according to the Ministry of Power, Energy and Mineral Resources.
“The Energy Division recently made clear its position on oil purchase and selling price with a view to adjusting domestic fuel price in line with international markets. But the Finance Ministry called for returning of the money that was provided as subsidy before such price cut,” Energy Division Secretary Nazim Uddin Chodhury said.
The Ministry of Finance now claims the support money should be treated as loan with 5.0 per cent annual interest, while the BPC has been arguing for tagging it as subsidy, he said.
It appears that the Finance Ministry’s move is aimed at stalling the fuel price cut in domestic market. All countries of the world including Bangladesh’s neighbours have reduced fuel prices several times in the recent time adjusting with the global market price. But Finance Ministry appears denying it to common people.
So the fuel oil price would not be cut soon as the Finance Ministry now argues it wants to increase the financial capacity of BPC for averting any future crisis, said an additional secretary of the Finance Ministry not to be named.
On the other hand, the Ministry of Finance has given commitment to International Monetary Fund (IMF) to keep fuel price at present stand.
The indecision over the issue has been delaying downward adjustment of domestic petroleum prices although oil prices in the international market nosedived, concerned sources added.
The BPC, which has currently turned into a profitable entity with the drastic fall in oil prices in international market, had been a losing concern for over one and a half decades until fiscal year 2014.
The BPC, which never attained profit over the past 14 years since fiscal year 2002, already bagged a profit worth around Tk 520.68 crore (provisional) in 2015, the sources said.
The government last made changes to the domestic oil prices three years back, on January 4, 2013.
According to the analysis prepared by the ministry concerned last week, import of diesel costs Tk 21 per litre, but the retail price is Tk 68. Octane is imported at Tk 60 per litre but its retail price is Tk 99.
As per the latest cargo that reached Chittagong Port a couple of weeks back, BPC attained profit worth Tk 27 per litre against its sale of diesel, as it could purchase the fuel at $45 per barrel from the international market, said an official involved with petroleum import.
BPC fetched profit worth Tk 26 per litre against import of furnace oil. It attained profit at around Tk 37 per litre against petrol and Tk 39 per litre against octane.
The BPC had to count significant losses before the downtrend in oil prices in international market until June 2014. It purchased petroleum products at higher prices (US $120 per barrel) from international market and sold those at lower rates, as administered by the government.
Bangladesh is among a very few countries that kept the domestic oil prices higher despite drastic fall of price in international markets.
