All to themselves

The state-owned Bangladesh Petroleum Corporation  is currently making an astounding profit of Tk 29 on per litre diesel as fuel oil price dropped around the world, officials confirmed to The Business Post (TBP).

But the government is keeping the benefits only to itself and has decided to keep the pressure on consumers by not reducing fuel prices in the country.

Experts condemned the state’s decision, saying the government is only seeking profits and not thinking about the people.

Downward prices a boon for BPC

According to the global energy related websites, crude oil prices have decreased by more than 10 per cent over the last week.

Prices of Murban, the flagship crude oil of Abu Dhabi National Oil Company (ADNOC), fell to $74.53 per barrel on Monday, the lowest this year, according to oilprice.com. The crude oil is largely consumed in Asia.

Bangladesh imports three-fourths of its total consumption of refined oil, most of which is diesel. 

On December 7, prices of per barrel diesel stood at $99 in the Platts Asia Pacific/Arab Gulf Marketscan, which gives a comprehensive daily market overview, according to BPC’s operations and planning department.

On December 9, the diesel price fell further to $98 per barrel. In order to import the oil, BPC has to provide a $12 premium on top of it, which would put the retail price of per litre diesel at around Tk 71 in the country. However, BPC officials said an additional Tk 5 should be added to the retail price as distribution costs and dealer commissions. Meaning,  per litre diesel should cost Tk 80 in Bangladesh.

But the government has put the price at Tk 109 per litre, allowing BPC to earn Tk 29 as profit on per litre diesel.

Consumers left to fend for themselves

Despite BPC making stupendous profits , the government is currently not considering reducing fuel oil prices in the country. Although, the prices were hiked last August following an upward trend on international oil markets. 

Tawfiq E Elahi Chowdhury, the Prime Minister’s advisor on power, energy and mineral resources, told reporters on Sunday that the price of fuel oil is totally unstable in the global market.

He said, “Currently, fuel oil prices have dropped to $70 to $80. It will not take long for the prices to climb back to $120 by tomorrow.

“We have to set the price wisely. But the price is not going down now.”

Criticising the government’s position on the issue, experts called for decreasing fuel oil prices in the country following the global trend.

Professor M Shamsul Alam, senior vice president of Consumers Association of Bangladesh, said, “The government does not think about the people. It is only seeking profit.”

He also said, “BPC is not a transparent institute. We have no clear data about BPC and its profit and losses.”

Meanwhile, BPC officials said the state-owned organisation is responsible for importing, distributing and marketing oil and petroleum products across the country. However, it does not have authority to decide whether the price will go down or not.

“The government wants more profit because BPC was counting losses before price hikes last August this year,” a BPC official told TBP on condition of anonymity. 

Apart from diesel, BPC also sells petrol, octane, kerosene, lubricant, jet fuel and furnace oil.

BPC officials said the government is counting profit from these energy products separately.

The BPC has been making profits for months now. A TBP report, published in September this year, states that BPC was counting profit around Tk 450 crore per month at the time, when its profit per litre diesel stood at Tk 9. 

The government hiked diesel prices by 42.5 per cent on August 5 at midnight to Tk 114 from Tk 80 per barrel, when the price of refined diesel was $139 in the global market.