Profit-making BPC counts Tk 1,800cr loss in three months

Although the Bangladesh Petroleum Corporation used to make a monthly profit of around Tk 65 crore just a year ago, the state agency incurred losses of Tk 1,800 crore from August to October due to a steady increase in fuel oil prices across the globe.

The corporation lost Tk 727 crore last October, its highest loss in the three month period.

This was revealed in a BPC report recently sent to the Ministry of Power, Energy and Mineral Resources, which added that the state agency is seeking the jurisdiction to adjust local fuel oil prices on the basis of international rates every month in a bid to curb losses.

The government on Wednesday hiked diesel and kerosene prices by Tk 15 for per litre.

The price of fuel oil was much higher in India compared to the current prices in Bangladesh, and the report also expressed concerns over the possibility of this vital resource being smuggled to the neighbouring country.

Commenting on the issue, energy division’s Senior Secretary Md Anisur Rahman on Wednesday told The Business Post, “The price of per barrel fuel oil has exceeded $95 in the international market, and it could go up even further. It is necessary to adjust the local prices accordingly.

“There is no alternative to this move.”

The Bangladesh Energy Regulatory Commission (BERC) is supposed to set prices for petroleum products under to the BERC Act, but the energy division has been directly handling this responsibility with support from the finance ministry.

The BPC currently has the jurisdiction to set only the furnace oil prices, but they now want to set the prices for all fuel oil including diesel, octen, kerosin and petrol. Bangladesh previously saw an increase in fuel oil prices back 2013, but the prices dropped again in 2016.

Making adjustments on the basis of international market rates, Bangladesh in 2013 had set prices for per litre octen at Tk 99, Petrol at Tk 96, and kerosin and diesel at Tk 68. The prices went down in 2016, as the government set diesel prices at Tk 65, kerosin at Tk 65, octen at Tk 89 and petrol at Tk 86.

With the latest increase in prices, the BPC is making a profit of Tk1.99 for per liter diesel and kerosene, mentioned another BPC report.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid recently told the media, “There is no alternative to adjusting the fuel oil prices. We have suffered significant losses while trying to follow the previous pricing structure.

“The oil prices have increased many-fold across the globe after the Covid pandemic eased, and the situation is now dire. The price of per barrel crude oil has exceeded $90, which is the highest in seven years.”