Bangladesh Petroleum Corporation (BPC) is titling towards foreign loan to import fuel. The agency has asked for government approval to take $ 1.2 billion as loan from the government.
The proposal states that BPC will spend the money to meet the demand for fuel. But specialists feel that entanglement in such a huge loan will impede BPC’s development projects.
The proposal is currently with the energy ministry for approval. Later, it will be sent to the Economic Relations Division (ERD).
If the permission comes then agreement will be signed. Currently, BPC has very little loan and loss has come down to Tk 50-70 million every day.
To get financing for the import of fuel from International Islamic Trade Finance Corporation (ITAFC), a team from Bangladesh visited Jeddah between Jun 24 and 25. At this meet, ITAFC agreed to provide $ 120 million as loan in 2020.
Due to fall of the price of fuel in three years of the last ten years, BPC has made some profit and it started several development projects. BPC took projects like Single Point Mooring Terminal and the establishment of pipelines.
But with losses mounting, these projects have slowed down.
The interest rate of ITAFC is 4.05 percent.
High ups of the energy division, say: “BPC could not form a fund to import fuel and every year incurred a loss of Tk 20 billion; in such a state, a new loan will only hamper projects.”
Some of BPC’s initiatives to control price of fuel are hanging; if these were implemented then fuel would become affordable and there would not be scarcity of it in the country.
BPC says that the country has a requirement of 6 million tonnes of fuel; of this, only 1.5 million tonnes can be purified in the country. The rest is purchased by BPC.
This means that every year, 4.5 million tonnes of refined oil is imported and for each litre, an added Tk 6 is spent. To avoid this expenditure, BPC took the initiative to increase the capacity of Eastern Refinery by 3 million metric tonnes.
However, efforts to get fund for this have not yielded any result since 2009.
A BPC official adds: “The government should provide 100 percent subsidy to BPC; no one wants to give loan to a loss making organisation.
BPC chairman, Shamsur Rahman could not be reached for comments.