Bangladesh Petroleum Corporation (BPC) struggling to pay fuel bills

For two-and-a-half years, BPC has been unable to pay bills on time due to the dollar-crisis. Suppliers are pressing for payment. Bangladesh Petroleum Corporation (BPC) is not getting foreign currency dollars from the bank even if it wants to. Due to increasing arrears, some companies do not want to send oil ships. Some ships arrive after the scheduled time. The pressure of foreign companies supplying fuel to pay bills is increasing on BPC.

According to BPC sources, BPC has accumulated a total of 476.1 million dollars in arrears till August 22. Of these, the most outstanding is the Singapore-based company Vitol, they will receive 185.6 million dollars. One of their bills from Sonali Bank has already been delayed by 110 days. Some companies also have 94 days, 85 days delayed bills.

The Chinese company Unipec will receive about 58.6 million dollars. Inc. of the United Arab Emirates will receive 5 million 71 million dollars. Indonesia's BSP will receive 4.69 million dollars. Malaysia's PTLCL will get $2.18 million. And India's IOCL will get two and a half million dollars.

Two responsible officials of BPC told Prothom Alo on the condition of anonymity that according to the agreement, 6.5 percent of the money has to be paid annually as a penalty. However, no organization has yet pushed for late fees due to long business relationships. However, they insist on paying bills quickly. They have been asked for some time to explain the existing situation of their country by meeting in stages. It has also been mentioned that there was a delay because the bank was closed.

The Chinese company Unipec will receive about 58.6 million dollars. Inc. of the United Arab Emirates will receive 5 million 71 million dollars. Indonesia's BSP will receive 4.69 million dollars. Malaysia's PTLCL will get $2.18 million. And India's IOCL will get two and a half million dollars. Apart from this, outstanding installments have also accumulated in foreign financial institutions. International Islamic Trade Finance Corporation (ITFC), a subsidiary of Islamic Development Bank, provides regular loan assistance to BPC to pay the import price of fuel oil. They will receive more than 8 million dollars.

According to BPC sources, BPC needs to open 17 to 18 loans to bring 5 lakh tons of refined fuel oil and 1 lakh tons of crude fuel oil every month. Banks regularly hesitate to open loans in dollars. A loan takes 25 to 30 days to repay.

BPC has been making profit for more than two years by selling fuel oil. They are adjusting the price every month since last March. So the company is no longer in danger of incurring losses. But they have been in trouble for two and a half years to raise dollars to pay foreign debts. Banks were closed for several days during the anti-discrimination student movement and government change last month in July. BPC is in more trouble. In addition to payment of dues, complications have arisen in opening loans.

According to BPC sources, BPC needs to open 17 to 18 loans to bring 5 lakh tons of refined fuel oil and 1 lakh tons of crude fuel oil every month. Banks regularly hesitate to open loans in dollars. A loan takes 25 to 30 days to repay. Even if the central bank gives 2 million dollars from time to time, the arrears cannot be fully paid with it.

Regular meetings are being held with the suppliers. It is explained to them that due to a special circumstance, the delay in payment of the debt is due. They have also been asked to pay their bills gradually. BPC Director (Operations) Anupam Barua said they would not stop oil supply due to long business relationship

Annually, BPC requires 60 to 65 lakh tonnes of fuel oil. Out of this, the capacity of the country's only refinery is 1.5 million tons per year. The rest is imported directly. However, among the different types of fuel oil used in the country, 75 percent is diesel. And 80 percent of diesel is directly imported. Foreign companies selling oil to BPC are threatening to cut off fuel supply.

BPC director (operations) Anupam Barua said regular meetings are being held with the suppliers. It is explained to them that due to a special circumstance, the delay in payment of the debt is due. They have also been asked to pay their bills gradually. They will not cut off oil supply due to long business relationship.

M Tamim, Special Assistant to the Chief Advisor of the former Caretaker Government, said that this problem of Bill Bakare has been going on for a long time. It's not a money problem, it's a lack of dollars. The problem should be solved step by step. Otherwise it will be difficult to continue such a situation. He said that if the new government gets the dollars from the development partners to pay the dues of the energy sector, the problem will be reduced a lot.

However, fuel oil stocks are still in a satisfactory condition. As of August 22, the stock of diesel is 4 lakh 26 thousand tons. With that, the demand of the country can be met for at least 35 days. There is about 23,000 tonnes of petrol in stock, which will last for 18 days. Octane has 33 thousand 228 tonnes, which is equivalent to 25 days' demand. Although a major part of petrol and octane is produced in the country. So there is not much uncertainty about it. The jet fuel used in the aircraft is 40 thousand 25 tons, which can meet the demand of 26 days. However, there are 33 thousand 452 tons of furnace oil used in electricity generation. This amount of oil is supposed to last 12 days. There is now a demand for oil in power plants. But most of the suppliers are not willing to provide furnace oil. A ship with furnace oil is due to arrive by August 30. If it lags behind, it can lead to crisis.

Muhammad Fawzul Kabir Khan, Advisor on Power, Energy and Mineral Resources held a meeting with the World Bank delegation at the Secretariat last Wednesday. He pointed out that the import bill in the power and energy sector is overdue by 220 million dollars. At the same time, he requested the World Bank to pay 100 million dollars in arrears. The World Bank said that it will be considered if it receives a formal proposal. Last Thursday, the energy advisor sought the assistance of the Asian Development Bank to pay the dues.

M Tamim, Special Assistant to the Chief Advisor of the former Caretaker Government on Energy, told Prothom Alo that this problem of Bill Bakair has been going on for a long time. It's not a money problem, it's a lack of dollars. The problem should be solved step by step. Otherwise it will be difficult to continue such a situation. He said that if the new government gets the dollars from the development partners to pay the dues of the energy sector, the problem will be reduced a lot.