BPC back in profit from oil trading

 M Azizur Rahman | Published: January 11, 2019 09:58:21 | Updated: January 11, 2019 12:53:36


The state-run Bangladesh Petroleum Corporation (BPC) is back in making profits from oil trading, thanks to a downtrend in oil prices in the international market.

The BPC earned profits of Tk 100 million from trading on Wednesday, newly-appointed BPC chairman Md Shamsur Rahman told the FE on Thursday.

He said the state-run oil corporation is making profits for the past several weeks as oil prices globally fell steeply.

It counted Tk 6.26 profit per litre in diesel trading, given its global price, which was around $66 per barrel on Wednesday, said Mr Rahman.

The corporation, however, incurred a loss of Tk 3.77 per litre in furnace oil trading when international price was $371 per tonne the same day, he added.

The BPC imports around 4.0 million tonnes of diesel and 200,000 tonnes of furnace oil every year.

It purchases petroleum products at lower prices from international market and sells at government-fixed rate, which is higher than global price.

This factor ultimately results in a rise in profits.

The BPC in late December last year reached the break-even point.

It was incurring a loss of around Tk 270 million daily only three months back due to a substantial rise in global oil price, a senior BPC official said.

The BPC was suffering a loss of around Tk 17 on account of marketing a litre of diesel and Tk 15 a litre of furnace oil.

It had estimated an annual loss of around Tk 97 billion in oil trading, considering the October oil prices in the international market.

It sought Tk 85 billion as subsidy from the finance ministry to foot oil import bills for fiscal year (FY) 2018-19.

If the current trend in oil prices continues globally, the BPC would not require any subsidy from the government, the BPC officials said.

The current price of furnace oil at retail level is Tk 42 per litre, diesel and kerosene at Tk 65, octane and petrol at Tk 89 and Tk 86 respectively.

The government in an executive order on April 24, 2016, fixed the prices which still remained unchanged.

After bagging hefty profits over the past three years since late 2014, officials said, the BPC started incurring loss since November 2017.

The BPC booked a Tk 42.12-billion profit in FY '15, Tk 63.42 billion in FY '16 and Tk 43.99 billion in FY '17, according to BPC statistics.

It also paid Tk 22 billion to the government exchequer in FY '16 and FY '17 as dividend.

It also paid Tk 30.90 billion in dues to Sonali, Janata, Agrani and Rupali banks and Tk 17.58 billion to Petrobangla.

The corporation also paid Tk 6.03 billion as overdue Value Added Tax to the National Board of Revenue over the past several years from its profits.

Before late 2014, it had incurred a loss of Tk 23.32 billion in FY '14 and Tk 48.32 billion in FY '13.

In FY '12, the loss was Tk 113.71 billion, which was Tk 88.40 billion in FY '11.

The BPC counted losses every year during the period between FY 2001-02 and FY 2013-14.

It imported 6.7 million tonnes of petroleum products like diesel, jet fuel, furnace oil and octane in FY '18.

In FY '19, the BPC might import around 7.5 million tonnes of petroleum products.

azizjst@yahoo.com

Share if you like