The Bangladesh Petroleum Corporation (BPC) fears incurring a loss of about Tk 80 billion in the upcoming fiscal year because of selling fuel oil at lower rate than import price, officials said.
To cope with its financial loss, the BPC has recently requested the government to set aside a budgetary allocation as subsidy for the corporation, they added.
However, the BPC has suggested the government not to raise the petroleum prices in the domestic market immediately.
But it opined that if the petroleum prices can be re-fixed on monthly or daily basis like neighbouring countries, such a big loss can be avoided.
The BPC in a letter to the energy division, which later was forwarded to the ministry of finance, said the petroleum prices were last reduced in the domestic market in April 2016.
Since then, the petroleum prices in the international market and the exchange between US dollar and taka continued rising.
The crude oil price reached $ 70.14 per barrel in April 2018 from $ 43.17 in April 2016, registering a growth of $ 26.97.
During the period, the diesel price went up by $ 37.56 per barrel and furnace oil by $ 222.93 per tonne.
The BPC said due to price hike of petroleum oil in the international market, the corporation started incurring loss since October 2016 in case of furnace oil, and since November 2017 in case of diesel.
According to a calculation made on April 25 this year, the BPC was incurring a loss of Tk 12.33 for selling per litre of furnace oil while Tk 8.90 for selling per litre of diesel, and Tk 7.02 for selling per litre of kerosene.
For selling furnace oil, diesel, and kerosene at lower rates than import prices, the BPC is incurring a loss of Tk 203.62 million each day and Tk 6.108 billion every month, the corporation said in the letter.
In the fiscal year 2018-19, some new oil-fired power plants will go into operation thus the BPC predicts that the petroleum demand may increase by 20 per cent compared to the current fiscal year.
The BPC estimated that in the next fiscal year, it may need to sell 7.116 billion litres of diesel, 1.298 billion litres of furnace oil, and 202.88 million litres of kerosene and it will suffer a loss of Tk 80.76 billion if the petroleum prices remain at present level.
When contacted over telephone, BPC director (finance) Altaf Hussain Chaudhury told the FE that the energy division wanted to know the possible loss in the next fiscal year for selling petroleum products at subsidised prices.
"We have calculated the possible loss based on the existing prices and an estimation of selling volume in the next fiscal," he said.
Mr Chaudhury said BPC as a statutory body does not suggest raising petroleum prices in the domestic market. "We need to act based on government decision," he said in reply to a query.
But he said the corporation suggested re-fixing petroleum prices every month or every day like various neighbouring countries. "It may help us save from incurring of a big amount of loss."
