Foreign airlines can now buy fuel in own currencies

The Bangladesh Bank on Monday allowed authorised dealer (AD) banks to issue drafts for purchasing fuel in foreign currency by foreign airlines operating in the country.

It issued a notice, saying the move would help state-owned fuel selling companies.

In this context, the equivalent amount in taka could be shown in the disbursement statement required for reporting purposes, the notice said.

Earlier, foreign airlines could only use the local currency to purchase fuel from state-owned companies like Padma Oil Company.

The notice said AD banks receiving drafts in foreign exchange may, besides encashment, retain the amounts in margin accounts or approved foreign currency accounts in the name of state-owned fuel selling companies.

It also said the amount retained in foreign currency would be used either for settling import payments or encashment in taka. Foreign airlines only purchase jet fuel from Padma Oil Company.

A high official of the company described the central bank’s move as a good decision.

“We can retain the foreign currency, and it would be used to settle import payments,” he said.

Bangladesh Petroleum Corporation recently raised jet fuel prices.

In the last one year, jet fuel prices increased 11 times, said industry insiders.

In December 2020, jet fuel price was Tk 48 per litre, which rose to Tk 53 in January this year. It then increased to Tk 55 per litre in February, Tk 60 in March, Tk 61 in April, and Tk 70 in October.