Bangladesh Petroleum Corporation (BPC) is now worried about profit reduction after being in profit for a long time due to late payments amid dollar shortages.
Although the government had given subsidies earlier, BPC started profiting from the 2014-15 fiscal year. The state-owned company made more than Tk 47, 500 crores profit until the 2022-23 financial year. However, the 2021-22 fiscal was exceptional. It incurred Tk 2,706 crore losses in that year. In December 2022, Bangladesh Petroleum Corporation former chairman ABM Azad told journalists that BPC has counted around Tk 9,000 crore losses by selling fuel oil in 10 months from February to November.
Sources at the BPC told Bangladesh Pratidin that the company couldn’t pay the bills of foreign oil companies due to the dollar crisis. Now the company started to pay the bills. It has also made some late payments because these are overdue. This money is being paid from BPC's profit. If the oil price increases further in the international market, BPC can’t stay in its profit position.
The company hiked the price of oil abnormally in the local market as oil prices skyrocketed in the global market in the past years. On the other hand, when oil prices decline in the international market, BPC doesn’t cut the oil price in the country.
Energy experts said BPC is not supposed to incur losses by selling fuel oil. Besides, the company is adjusting oil prices with the global market. BPC is not supposed to be in loss in this formula. They said BPC must estimate its income and expenditure with transparency. Energy experts have been advising for long to audit the financial accounts of BPC by international organization.
The BPC has once again returned to the losing trend from the 2021-22 fiscal after being profitable for seven years at a stretch. It counted loss as the price of oil hiked in the global market due to the Russia-Ukraine war. The company incurred losses despite increasing all kinds of oil prices from 42 per cent to 52 per cent in August 2022. Sources said BPC amounted loss more than Tk 110 crore per day in 2022. It counted around Tk 5,000 loss in just four months from February to May of that year. The BPC authority said it expensed an additional Tk 7,000 crore in imports during the period in 2022. It also incurred losses of Tk 283 crore in February, Tk 1,323 crore in March, Tk 1,498 crore in April and Tk 1,495 crore in May of that year.
BPC Chairman Amin Ul Ahsan said, “We face problems due to the dollar shortage. Now we are stable slightly. We couldn't pay bills for a long time. Even though we had money, we couldn’t pay bills due to the dollar shortage. We had made some late payments due to overdue. This money is being expensed from profit. BPC made a profit earlier. However, this profit is much less compared to our annual turnover. Our profit margin is very low in comparison with international companies.
We have made a profit of around Tk 3,500 crore in the last fiscal year. We hope BPC will make a profit in the current fiscal also. However, the profit is likely to decrease slightly. But there is less possibility of loss as the government won’t sell oil by giving subsidies maintaining the World Bank’s conditions. For this reason, BPC will stay at the break-even point instead of losing. If we can’t sell oil with profit and if the oil price rises in the global market, then we have to experience break-even. If BPC sells oil with zero margins in two months, it will count no loss, and no profit during the period. If this trend continues, BPC can’t make much profit.”
The BPC couldn’t pay its imported fuel oil bills on time for two and a half years due to the dollar shortage. In the meantime, fuel oil suppliers started pressing for outstanding bills. BPC struggled to pay the bills. At that time foreign currency or dollars were not available at banks. Many exporters didn’t want to send oil-laden ships because of outstanding bills.
Sources at the BPC said the company has around 48 crore dollars (5 thousand 734 crore 98 lakh 72 thousand) outstanding bills till August 22. Of the amount, Singaporean company Vital will get $18.56 crore outstanding bills, Chinese company Unipac $5.86 crore, Emirates National Oil Company (ENOC) $5.71 crore, Indonesian company BSP $4.69 crore, Malaysian company PTLCL $2.18 crore and Indian company IOCL will get $2.5 crore outstanding bills. Besides this, BPC has new outstanding bills from various foreign companies. International Islamic Trade Finance Corporation (ITFC) provides loans to BPC regularly to pay import bills of fuel oil. The ITFC owes more than $8 crore. The BPC has started to pay the money to ITFC.
In this regard, Amin Ul Ahsan said, “Due to the dollar crisis at that time our bill payment was delayed. But we had enough money in the bank. We import oil worth at least Tk 15,000 crore every year on average. BPC has now this money. LC (Letter of Credit) is being opened for it. We had given interest due to late payment. The dollar crisis is now at a tolerable level. We have a small amount of outstanding bills.”
bd-pratidin/GR
