Non-payment of debt to govt

Muhith slams BPC

Subjects its borrowing to strong monitoring

Syful Islam | Published: June 06, 2018 10:12:55 | Updated: June 07, 2018 19:36:44

FE file photo shows Finance Minister AMA Muhith

Finance Minister AMA Muhith expressed his deep annoyance at the Bangladesh Petroleum Corporation's (BPC's) failure to pay its debt to the government.

"The BPC is violating both policy and rules concerning the public accounts. This is in no way acceptable," the finance minister wrote in a note.

The corporation drew Muhith's ire as it did not comply with a previous directive of the ministry of finance.

In January last year, the government asked the BPC to deposit Tk 50 billion in the public exchequer against the loan it had received in the past from the government.

Recently, the BPC has sought from the government a couple of state-level counter guarantees for importing petroleum products worth US$ 400 million.

The International Islamic Trade Finance Corporation (IITFC) would finance the imports.

While approving the counter guarantees last week, Muhith asked the BPC to repay its past debt in the public exchequer immediately and submit the copy of chalan (invoice) to the ministry of finance.

He also asked the corporation to report to the finance division by the first week of every month about the amount of supplier's credit or short-term loans it took in the previous month.

Besides, the BPC and the relevant bank or any other loan provider will have to inform the finance division by the first week of every month about the amount of loans it has taken under state counter guarantee.

The BPC has also been asked to inform the finance division about the liquidity status of the corporation within the first week of every month.

Contacted over telephone, BPC finance director Altaf Hussain Chaudhury told the FE that the corporation incurred losses during the last couple of months due to the selling of fuel oil at prices lower than the cost of import.

"We are compelled to sell products at a subsidised rate," he said.

"How can we pay back money to the government?"

Replying to a question, he said the BPC's daily loss on account of oil marketing is around Tk 300 million now.

The corporation incurs a loss of Tk 22 for each litre of oil it sells.

He said between the fiscal years (FYs) 2000-01and 2013-14, the BPC incurred an aggregate loss of Tk 270 billion.

"We requested the government to give us subsidies. But the government considers the amount given to the BPC as loan", he said.

"This is not rational," he added.

He said that when the BPC made profit after FY 2013-14, it repaid its debts worth Tk 30 billion to the banks.

Besides, in the FY 2015-16 and FY 2016-17, the corporation paid the government Tk 10 billion and Tk 12 billion respectively as dividend.


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