Kazi Zahidul Hasan :
Bangladesh Petroleum Corporation (BPC) is facing big trouble to import oil from international market due to the deepening dollar crisis in commercial banks.
The crisis looms since November last year with sudden rise in import and trade deficit, officials said.
As the crisis deepens further, they said, banks have reportedly refused to open letters of credit (LCs) on BPC’s behalf forcing it to seek the central bank’s intervention to overcome the situation, officials said.
“Fuel import by BPC has faced serious setback following banks’ refusal to open LCs,” a senior BPC official told The New Nation yesterday, on condition of anonymity.
BPC used to import oil through public and private commercial banks (local and foreign) in the country.
“Recently, we approached banks to open LC for maintaining BPC’s oil import schedule. But six of the corresponding banks have turned down the BPC’s request citing dollar crisis,” said the BPC official, adding, ” This will lead to delay in oil import by BPC and thereby, disrupt supply of petroleum products in the country.”
He further said uncertainty over the LC opening can hinder timely import of oil and it can have bad impact on power generation and factory production and economic activities across the country.”
“Considering the sensitivity of the issue, we recently wrote to the central bank for necessary action,” he said.
The New Nation also obtained a copy of the BPC’s letter, which referred to One Bank, BRAC Bank, Prime Bank, Standard Chartered Bank, HSBC and City Bank NA for refusal of opening LC.
BPC also used to import oil through four state-owned commercial banks–Sonali, Janata, Agrani, and Rupali. Among them, Rupali usually open four to five LCs in a month. But it is now merely opening one LC due to dollar crisis. Besides, Sonali Bank halted opening fresh LC on BPC’s behalf on the same ground, according to the letter.
BPC imports crude and refined oil every year according to the country’s demand.
In the last fiscal year (2016-17), the BPC had imported around 59 lakh tonnes of petroleum products. Of them, 64 percent is diesel, 17 percent furnace oil and five percent kerosene. The rest are octane, petrol and other products.
Oil import by BPC will reach 64 lakh tonnes by the end of the outgoing fiscal (2017-18).
“Banks are suffering from dollar shortage as the value of import LCs exceeds the amount of dollar available in the forex market,” a chief executive of a private bank told The New Nation.
He said the central bank has so far pumped US$2.7 billion dollar in cash in the market, but pressures quickly build again due to rising import payment against lower export earnings.
According to Bangladesh Bank (BB), overall import increased by 25.17 per cent during July-April period of the fiscal 2017-18 fiscal and stood at US$ 49 billion (C&F value) while it was US$ 34.98 billion during the corresponding period of the fiscal 2016-17.
On the other hand, the country’s merchandise export during July-April period of the fiscal 2017-18 increased by 6.41 per cent to US$ 30.40 billion compared to US$ 28.57 billion during the corresponding period of previous fiscal.
