FT Online

Published:
2019-09-08 12:18:40 BdST

BPC swings to profit as int'l oil market cools


State-run Bangladesh Petroleum Corporation (BPC) started racking up profits again in oil trading on the back of falling international oil prices.

The recent fear over the economic fallout from the U.S.-China trade war has resulted in the decline in international oil prices proving a boon for the government agency, industry insiders said.

The BPC's daily profit now amounts to around Tk 20 million as it makes windfall in trading of diesel, which accounts for the lion's share of its petroleum products, a senior Corporation official said.

It has returned to the green zone over the past several weeks as the oil prices in the international market made a steeper drop.

The BPC counted profit of Tk 2.0 per litre in diesel trading, considering its price in the international market, which was around US$74 per barrel on Tuesday, said the official.

Still, the corporation incurred a loss of Tk 3.60 per litre in furnace oil trading when international price was $365 a tonne on Tuesday, he said.

The Corporation imports around 5.0 million tonnes of diesel and 200,000 tonnes of furnace oil every year.

It currently purchases petroleum products from the international market and sells those at the government-fixed rate, which is now higher than the international oil price for diesel and lower than that of furnace oil. Earlier, this year, the agency had incurred losses from March to late July due to an uptrend in oil prices in the international market.

The BPC's loss was around Tk 110 million daily during April this year, said officials.

They said if the current downtrend in oil price in the international market continues, the BPC will not require any subsidy from the government.

The current price of furnace oil at the retail level is Tk 42 per litre, that of diesel and kerosene Tk 65 per litre. Octane and petrol are selling at Tk 89 and Tk 86 per litre respectively.

The government through an executive order on April 24, 2016 fixed the price and since then, the price has remained unchanged.

Officials said the Corporation reaped hefty profits during the three years of oil trades from October 2014 to November, 2017.

The BPC booked a profit of Tk 42.12 billion in fiscal year 2014-15 (FY 2015) while Tk 63.42 billion in FY 2016 and Tk 43.99 billion in FY 2017, according to BPC statistics.

It also paid Tk 22 billion to the government exchequer in FY 2016 and FY 2017 as dividend.

The corporation also repaid dues amounted to Tk 30.90 billion to state-owned Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank, Tk 17.58 billion to Petrobangla and Tk 6.03 billion as overdue value-added tax (VAT) to the National Board of Revenue (NBR) over the past several years from its profits.

But after November 2017, the BPC has been witnessing both loss and profit due to choppy oil prices in the international market.

Currently the BPC has deposited funds worth around 215.80 billion with different commercial banks, which is the highest among the state-owned autonomous bodies.

It had incurred a loss of Tk 23.32 billion in FY 2013-14 and Tk 48.32 billion in FY 2012-13.

In FY 2011-12, the loss was Tk 113.71 billion, which was Tk 88.40 billion in FY 2010-11.

The BPC counted losses every year between FY 2001-02 and FY 2013-14.

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