BANGLADESH Petroleum Corporation (BPC) has expressed its inability to pay over Tk 600 crore tax and VAT to the National Board of Revenue (NBR) which has fallen outstanding from three of its oil subsidiaries – Meghna Petroleum, Jamuna Oil and Padma Oil. BPC has shown financial crunch as the reason for the three companies for failing to pay the outstanding while bringing pressure on the Ministry of Finance to make payment for the state-owned oil conglomerate, a national daily reported on Sunday quoting Finance Ministry sources. The overdue also includes payment to other agencies including banks. As we see the BPC’s request has come at a time when the corporation is earning handsome profit buying petroleum from international market at almost half prices and selling at previously fixed price in domestic market.
A report in a Bengali daily yesterday showed BPC’s profit now stands over Tk 35 from per liter of octane and petrol while profit on per liter of diesel, kerosene and furnace oil stands over Tk 14, 13 and 19 respectively. So the natural question anybody may raise is why the government should pay the outstanding of a state-owned corporation with tax-payers money when it is earning huge profit. A business organization; which can’t earn enough to meet obligations can’t justify existence in the long run. We believe the demand that the state should pay is not also justified when BPC employees take huge financial benefits otherwise showing good annual business.
The Finance Ministry has turned down the request made recently in a letter by BPC chairman pointing out that the local market situation does not warrant any need for financial support to repay the outstanding. It has asked BPC to take steps to pay the NBR dues. It is noticeable that the BPC’s request to pay its outstanding by the government has come at a time when a similar request by state-owned Teletalk mobile operator recently urged the Bangladesh Tele-Regulatory Commission (BTRC) to pay Tk1600 crore for its 3G license now falling outstanding over a year. The Teletalk management made the plea using similar financial crunch as the reason for the failing. Here again the Ministry of Finance is under pressure from some political quarter to pay the outstanding.
It is a matter of great concern as to why BPC can’t pay its outstanding particularly at a time when the market is generating huge profit. Similar pleas by Teletalk raise the question as to why state-owned corporations are having the mess despite the fact that they are enjoying all government incentives as big players in the economy. Besides corruptions and management inefficiency, bigger leakages may be at work in big organizations allowing powerful people to swindle public resources making easier to ask the Finance Ministry to repay the debts. It has to be said that business corporations must run on business calculations and easy relief will only remove pressure on them to become efficient and plug big swindling. Such reimbursement requests must not be entertained.
