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Bangladesh Petroleum Corporation (BPC) has estimated that it would earn a profit worth around Tk 2.05 billion this month (August), the very first month of raising the prices of fuel oils.
The profit would come from the sales proceeds of diesel and octane only subject to availability of US dollars at official rates for importing the petroleum products, its chairman ABM Azad revealed the projection at a press briefing at his office in the city's Karwan Bazar on Wednesday.
"If our August sales of diesel and octane remain similar to that of July and we get US dollars at the rates offered (officially) by banks, we will be able to achieve the target," he said.
Currently, the state-run fuel oil distribution company is opening letters of credit (L/Cs) at the market rate of US dollar, said the chairman, adding that the corporation is now earning a profit of Tk 25 per litre by selling octane. It is also registering profit by selling petrol, which is entirely produced locally.
A source said the profit on petrol sales would be around Tk 30 per litre.
The BPC chairman claimed that the corporation now has around Tk 198.82 billion in its accounts, which would be equivalent to less than two months of its import costs.
He noted that currently the BPC's overall loss is Tk 6 per litre. On the other hand, he said, the BPC is paying taxes worth Tk 20.70 per litre on diesel imports and Tk 23.5 per litre on octane imports.
He also informed that the BPC has a 30-day consumption-equivalent diesel stock, which is 294,319 tonnes, 19 day's stock of octane 22,827 tonnes, 18 day's stock of petrol to the tune of 19,174 tonnes and 32 day's stock of jet fuel 35,780 tonnes.
Mr Azad also claimed that misleading information is being spread by different quarters about the BPC's deposits and profits, and disagreed on the report that the corporation had made a profit of Tk 480 billion in seven years from 2014-15 to 2020-21 fiscal years.
He said the BPC had made a profit of about Tk 420 billion, but it had to spend half of the amount to import petroleum products at higher prices from the international market.
Meanwhile, speakers at a seminar earlier on the day said that the BPC has already started making profit from the very first day of hiking the oil prices on August 6.
Local think tank Centre for Policy Dialogue (CPD) organised the seminar titled "Could the unprecedented fuel price hike be avoided now?" at its office in the city. CPD executive director Dr Fahmida Khatun delivered the keynote presentation.
If corruption, theft and mismanagement of the BPC could be checked and efficiency improved, there was no need to raise the prices at this moment all of a sudden, the CPD observed.
It said the price of octane per litre in Bangladesh is Tk 10 higher compared with the price in neighbouring India while the price of diesel per litre is Tk 2.0 higher.
The price of octane is higher by Tk 29 and diesel by Tk 16 compared with Vietnam, which is Bangladesh's biggest competitor in the global readymade garment (RMG) market.
The price of Octane in the USA is Tk 23.20 lower than that of Bangladesh, the CPD stated, urging the government to revert the decision of fuel price hike and said that its impact will have multiplier effects on the economy.
"The fuel price hike will push up the present 7.5 per cent inflation to a further high level," said Dr Khatun.
Former agriculture secretary Anwar Faruque said that as an impact of the fuel price hike, the rice production cost will go up by Tk 1,000 per bigha and finally, the price of coarse rice will go up to Tk 60 per kg in the coming season.
In that consideration, the cost of rice production per hectare will go up by Tk 4,000, said Mr Faruque, who was speaking at the event as an agriculture specialist.
He demanded an immediate announcement on the rice procurement price from the government for the next Boro season. "Otherwise, the farmers will not feel encouraged to produce rice on apprehension of incurring a loss, which will ultimately jeopardise the country's food security," he explained.
"I am sure the BPC is already earning profit out of the oil sales," said energy expert Professor Ijaz Hossain.
He said the steepest hike of oil prices by the government indicated that the government is no more interested in providing subsidies on the oil sector, which was very common previously.
Hiking the oil prices during the country's 'worst' time in history is similar to imposing indirect tax on the commoners to enhance government revenue, which the consumers are bound to pay, he said.
"It will be wise to introduce a formula and adjust the fuel price through the Bangladesh Energy Regulatory Commission (BERC)," he added.
He said that the energy regulator is entrusted with the responsibility, the consumers remain prepared to pay higher prices when the global price goes up and they will get the benefit of lower prices when it comes down.
"If India can adjust the fuel price commensurate with the global market trend, why Bangladesh cannot do it?" he questioned.
Vice president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Fazle Shamim Ehsan said hiking the diesel price is a double blow to the business entrepreneurs.
"We the industrialists were using diesel to ensure uninterrupted production as the government was unable to provide sufficient natural gas with necessary pressure to run our factories," he said.
The businessmen will have to arrange subsidies of their own to continue business operations as the consequences, he added.
"We will have to hike salaries of our employees too to keep them engaged in our industries," he said, adding, "Otherwise, they will go back home due to the increase in living costs."
Export orders are already witnessing a downtrend over the last couple of months, he said.
Bangladesh Jatri Kalayan Samity's Secretary General Mozammel Haque Chowdhory said the monthly transport expenditure per passenger will go up to Tk 6,000 due to the fare hikes following the oil price hike.
CPD research director Dr Khondaker Golam Moazzem alleged that there is no transparency and accountability in the BPC, which has a deposit of more than Tk 250 billion with different banks.
"Despite having such huge deposits, why did they need to increase the oil prices when everybody is under economic pressure due to the high rate of inflation," he questioned.
The government raised the prices of refined petroleum products by up to 51.68 per cent with effect from August 6.