In order to pay for fuel oil, the Bangladesh Petroleum Corporation (BPC) is having financial difficulties. The banks do not have foreign currency. Several of the supply businesses are refusing to provide any more consignments since the debt keeps growing. Shipments are frequently delayed. The BPC is under increasing pressure to pay its overseas suppliers’ outstanding balances.
Two trustworthy BPC officials, who spoke to Prothom Alo under the condition of anonymity, said that they would now be required to pay a six percent excise fee for the delay. But, given their long-standing business relationships with Bangladesh, none of the corporations are advocating for an excise duty.
BPC is being reminded, nevertheless, to regularly pay the bill. In a series of meetings with the supply firms, BPC requested time to explain the current state of affairs in the nation. There have also been claims that the recent bank closures are to blame for the delay.
BPC owes Tk USD 58.6 to Chinese company Unipec, USD 57.1 million to Emirates National Oil Company (ENOC), USD 46.9 million to Indonesia’s BSP, USD 21.8 million to Malaysian PTLC and USD 25 million to India’s IOCL.
Apart from these, BPC also has dues to clear with several foreign financial corporations. The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group provides loans assistance to BPC to clear the dues for imported fuel oil. BPC owes more than USD 80 million to them.
For the past two years, BPC has profited from the sale of fuel oil. Since last March, the government agency has been changing the price every month. As a result, the business is not currently concerned about suffering a loss. In spite of this, the business has been having trouble paying off international debt over the past 2.5 years. Additionally, during the struggle against discrimination and the regime change, the banks were closed for a few days. It led to more issues for the nation. In addition to the challenges associated with paying off international debt, the business is facing difficulties obtaining letters of credit (LCs).
According to the sources, in order to import 100,000 tonnes of raw fuel oil and 500,000 tonnes of refined fuel oil per month, BPC must open 17 to 18 LCs. However, banks are never eager to open dollar-denominated LCs. It requires 25–30 days to pay off a single LC’s loan. Even though the central bank occasionally releases USD 20 million, it is insufficient to pay off all outstanding debts.
The sources claim that BPC needs to open 17–18 LCs in order to import 100,000 tonnes of raw fuel oil and 500,000 tonnes of refined fuel oil each month. But banks never rush to open LCs denominated in dollars. A single LC loan takes 25–30 days to pay off. The central bank provides USD 20 million every so often, but not enough to settle all outstanding bills.
