Oil price in the international market has been increasing for the past two years, and simultaneously the rate of the US dollar, related to oil imports, has also picked up an upward trend.
On the one hand, fuel demand and oil imports in the country are rising, while on the other hand, the Bangladesh Petroleum Corporation is counting losses to the tune of around Tk 600 crore per month due to the accumulated impact.
Circles concerned fear that if the situation continues, BPC will lose around 8,000 crore taka by year’s end.
Energy experts say Bangladesh does not have anything to do with oil price control in the international market. So, we have to increase our own energy sources to overcome this unexpected situation.
On what BPC is thinking in this situation, Chairman Md. Shamsur Rahman told Bangladesh Post, “I have newly joined here. So, I have no detailed information. However, we have no plan to increase oil price at the moment.”
BPC sources said, per barrel crude oil price was $43.17 in April 2016. But due to price hike, they imported at $ 81.51 per barrel last August.
More than half of the imported oil is diesel. In April 2016, per barrel diesel import rate was $50.30 which was imported at $91.70 last August. The oil price is being increased in the international market. But price may be decrease at the end of this year, concerned people hope.
Currently, every liter of diesel is being sold at a loss of about Tk 9, and furnace oil at more than Tk 12. The daily loss of BPC is around 20 crore taka.
On the other hand, per unit electricity generation cost is now around Tk 15 for diesel-based power plant, around Tk 9 in 2016. Besides, furnace oil-based power plant generation cost is around Tk 10, which was 5 taka.
The dollar is related to import. The value of money is decreasing due to the increasing dollar value over the last two years. At present, one dollar is equal to 83.80 taka, below 80 taka in 2016. For this, import rate is increasing. In contrast, import of oil is increasing. In 2016, fuel oil of around 64 lakh tonnes was imported, now 70 lakh tonnes. The demand will increase next year.
Energy division sources said, since its establishment, in the last 40 years, the BPC has lost 20 years and 20 years profit.
To re-adjust these profits and losses, the government has given BPC as subsidy or loan, Tk 39 crore. The government has received tk 75,552 crore from the BPC as tax and VAT. Besides, the government has taken Tk 1,758 crore as dividend from the BPC profits till 2014-15.
Since June 2014, fuel price continued to decline in the international market. For almost two years, the crude oil price for every barrel was $30 to $50, over $100 before.
With the opportunity of reduced price, BPC profited about 30,000 crore taka till 2016. From this, the government has received revenue of about Tk 8,000 crore. Since last November, the losses are being counted again.
Meanwhile, there has been no import of octane and petrol in the country for three years. The total octane-petrol is being produced from condensate found as a byproduct in the country’s gas fields. As a result, these two products are now profitable.
Sources said, the government will not raise the price of oil before the elections. The subsidy amount will be increased. However, there is a need for special anti-smuggling surveillance, otherwise, the pressure on the state treasury and foreign exchange reserves will increase further.