Global oil prices crashed over fears of demand slump with the spread of newly exposed Covid variant 'Omicron' and the twist gave the state-run Bangladesh Petroleum Corporation (BPC) to see its profits swelling further daily.
By official count BPC's profit now grows to around Tk 25 million a day, an almost threefold rise from the amount it would profit a couple of days back, riding on a substantial raise given in domestic oil prices early this month and the latest fall in tariffs on the international market.
The government petroleum-marketing agency is now getting a profit of around Tk 1.75 per litre in diesel trading, as on November 26, cashing in on the double boosters.
In a sudden reveral of fortune for the oil producers-who saw a bloom on economic reopening after a gloom at prime time of the global pandemic-the price indices plummeted on concern that the new variant, discovered in Southern Africa, might dampen economic growth and trigger another demand slump, market-insiders said.
The corporation profit was around Tk 7.50 million a day as on November 23 trading, when it was profitting around Tk 0.50 per litre in diesel sales.
"If the downtrend in oil prices on the international market lasts long, BPC's profit margins will also go high," said one of the insiders.
Brent crude, the benchmark in international oil price, now hovers around US$72.72 per barrel-down from around US$ 82 on November 3, the date when the prices of diesel and kerosene were raised by around 23 per cent to Tk 80 per litre from the previous Tk 65--triggering protests and strikes and knock-on effects on commodity market, trade and living.
With the downturn, the international oil-price indice reverted to the level as on June 14, when the Brent crude was US$72.86 per barrel.
The Brent crude price later rallied to US$ 77.16 on July 5 before dipping to US$ 65.18 per barrel on August 20.
After August 20 the international oil prices soared as high as US$ 85.82 on October 20, the turning point from where it started dipping again, said sources.
After hiking domestic diesel and kerosene prices, the BPC also raised the furnace-oil price by around 17 per cent to Tk 62 per litre with effect from November 5.
It also increased the tariffs of jet fuel for domestic flights by 7.79 per cent to Tk 77 per litre and for international flights by 5.79 per cent to US$0.73 per litre.
The state petroleum corporation increased the oil prices domestically on grounds that it was incurring loss due to an upturn overseas though consumer-rights groups stood opposed.
BPC raised the fuel-oil prices at a level where it deemed its fiscal position at break-even point then, said one of the BPC sources.
The domestic oil-price hike sparked widespread protests, leading to several days of transport strikes, which were called off after hike in transport fares-in what is dubbed a double blow to consumers and economic activities.
Commoners are still protesting the oil-price hike and students are now demonstrating for half transport fares. The demonstrations have continued over the past several days to press home their demand.
State-run Bangladesh Road Transport Corporation (BRTC) buses, however, agreed to halve students' transport fares from December 1, but the private owners of transports still kept 'mum' on the students' plea, and insists on subsidy for them to concede to half fares.
The energy ministry had, however, assured of bringing down the oil prices on the domestic market with the fall in global oil rates.
Diesel is the key petroleum product that the BPC imports from the international market most. Among other major petroleum products, it also imports nominal quantity of furnace oil and octane to meet local demand.
The prices of octane and petrol are now Tk 89 and Tk 86 per litre respectively.
The corporation meets most of its furnace-oil demand from Eastern Refinery Ltd (ERL), which produces around 350,000 tonnes of furnace oil annually refining crude.
Most of the country's octane and entire petrol and kerosene demands are met from the ERL output.
Oil prices on the international market had seen the steepest fall during the acute coronavirus pandemic after March 2020. The price of Brent crude was as low as $19.33 per barrel on April 21, 2020.
During the price slump, the corporation counted profit of around Tk 16 per litre in diesel and Tk 5.50 per litre in trading of the respective petroleum products.
The profit was calculated after deducting value-added tax (VAT), and taxes payable to the National Board of Revenue (NBR) against imports.
The corporation currently imports around 5.0 million tonnes of diesel, 1.30 million tonnes of crude oil, 200,000 tonnes of furnace oil and 120,000 tonnes of octane annually.
The BPC alone procures around 85 per cent of the country's oil requirement, and the rest is brought by the private sector.
Furnace oil is mostly used in power plants in the country and most of which is imported by private power plants.
The private sector imports around 32 million tonnes annually to generate around 5,500 megawatts of electricity. They get 9.0-per cent service charge as incentives to import the fuel of their own.