Anisul Islam Noor :
There is hardly a chance of fuel price re-adjustment in local markets despite the fall in the international market in the past one year as Bangladesh Petroleum Corporation (BPC) first needed to recover the losses it had sustained because of subsidy, sources said.
Although Finance Minister AMA Muhith in a meeting with the FBCCI leaders had promised to re-fix fuel price in local markets to adjust with the international market, he shifted from his commitment to business leaders. In the meantime, he promised to the IMF not to reduce fuel price in line of its requirement to clear loan installment.
After that meeting with the apex business leaders, the finance minister had asked his ministry officials to initiate the process of cutting fuel oil price, saying Bangladesh Petroleum Corporation has been making profit out of selling fuel oil at high prices.
Muhith in his directives also asked the ministry officials to submit the financial portfolio of BPC, its amount of yearly profit, liabilities of the corporation to different institutions, including banks, revenue board and the finance ministry.
Sources said, the BPC made around Tk 5,000 crore profits in fiscal year 2014-2015 after prices of fuel oil were last raised in 2013 to keep the market at par with the global market. The prices of Octane, Petrol, Kerosene and Diesel are now sold at Tk 99, Tk 96 and Tk 68 respectively.
Per metric ton of brent crude oil was sold between US$ 47 and US$ 48 in international market last week. The production cost of octane is Tk 56.85 per litre but the customers are buying it for Tk 99, giving the state-run corporation a profit of Tk 35.49 per litre.
The BPC makes a staggering Tk 35.49 profit from every litre of octane it sells. It makes Tk 18 from selling diesel and Tk 17 from kerosene and jet fuel (JetA1), BPC sources said.
The profit margin is Tk 22 a litre in the case of furnace oil, according to BPC. As a condition for obtaining US$ 987 million in loans from the IMF under the extended credit facility programme, the government has promised that if the gap in oil price between the local and international markets exceeds Tk 10, it would go for price adjustment. Since global fuel prices have started to fall in 2013, domestic fuel prices have not been adjusted, a senior finance ministry official said.
AM Badrudduja, Chairman, BPC, said the liability of the corporation stood nearly at Tk 31,000 crore, including liabilities to the finance ministry and the revenue board.
‘We are liable to carry out the instruction of the government on adjusting fuel prices. But the issue of huge liability should be settled before any price cut,’ Badrudduja told The New Nation on Sunday.
A senior BPC official said their liability was caused due mainly to administered prices of fuel during the last decade upto 2013, as the corporation had to sell petroleum products at subsidised rates in the local market.
He said ‘book adjustment’ on the liability issue could be a tool to clear off the BPC from its huge liabilities.
There is hardly a chance of fuel price re-adjustment in local markets despite the fall in the international market in the past one year as Bangladesh Petroleum Corporation (BPC) first needed to recover the losses it had sustained because of subsidy, sources said.
Although Finance Minister AMA Muhith in a meeting with the FBCCI leaders had promised to re-fix fuel price in local markets to adjust with the international market, he shifted from his commitment to business leaders. In the meantime, he promised to the IMF not to reduce fuel price in line of its requirement to clear loan installment.
After that meeting with the apex business leaders, the finance minister had asked his ministry officials to initiate the process of cutting fuel oil price, saying Bangladesh Petroleum Corporation has been making profit out of selling fuel oil at high prices.
Muhith in his directives also asked the ministry officials to submit the financial portfolio of BPC, its amount of yearly profit, liabilities of the corporation to different institutions, including banks, revenue board and the finance ministry.
Sources said, the BPC made around Tk 5,000 crore profits in fiscal year 2014-2015 after prices of fuel oil were last raised in 2013 to keep the market at par with the global market. The prices of Octane, Petrol, Kerosene and Diesel are now sold at Tk 99, Tk 96 and Tk 68 respectively.
Per metric ton of brent crude oil was sold between US$ 47 and US$ 48 in international market last week. The production cost of octane is Tk 56.85 per litre but the customers are buying it for Tk 99, giving the state-run corporation a profit of Tk 35.49 per litre.
The BPC makes a staggering Tk 35.49 profit from every litre of octane it sells. It makes Tk 18 from selling diesel and Tk 17 from kerosene and jet fuel (JetA1), BPC sources said.
The profit margin is Tk 22 a litre in the case of furnace oil, according to BPC. As a condition for obtaining US$ 987 million in loans from the IMF under the extended credit facility programme, the government has promised that if the gap in oil price between the local and international markets exceeds Tk 10, it would go for price adjustment. Since global fuel prices have started to fall in 2013, domestic fuel prices have not been adjusted, a senior finance ministry official said.
AM Badrudduja, Chairman, BPC, said the liability of the corporation stood nearly at Tk 31,000 crore, including liabilities to the finance ministry and the revenue board.
‘We are liable to carry out the instruction of the government on adjusting fuel prices. But the issue of huge liability should be settled before any price cut,’ Badrudduja told The New Nation on Sunday.
A senior BPC official said their liability was caused due mainly to administered prices of fuel during the last decade upto 2013, as the corporation had to sell petroleum products at subsidised rates in the local market.
He said ‘book adjustment’ on the liability issue could be a tool to clear off the BPC from its huge liabilities.
