Coronavirus: BPC finds fortune

FT ONLINE

Profit of state-run Bangladesh Petroleum Corporation, or BPC, climbs to around Tk 230 million a day with the spread of Covid-19 pandemic.

Oil prices in the international market witnessed its steepest fall last week in the aftermath of coronavirus and oil-war between Saudi Arabia and Russia over ramping up output.

The corporation counted profit of around Tk 16 per litre in diesel and Tk 5.50 per litre in trading of the petroleum products as on March 11 due to lower global oil prices, said a senior official.

The profit was calculated after deducting value-added tax, or VAT, and taxes against the import of petroleum payable to the National Board of Revenue, or NBR.

Last month, the BPC had earned profit worth around Tk 3.0 per litre in diesel trading and incurred a loss of around Tk 1.5 per litre.

If the viral infection continues to spread and the oil producers keep boosting output, the BPC's profit will make a quantum leap, said the official.

BPC chairman Shamsur Rahman acknowledged the spread of the coronavirus and subsequent fall in oil prices in the international market proved a 'boon' for the corporation.

He, however, ruled out the possibility of slashing prices of domestic oil prices.

"Fixing the oil price is a policy issue by the government high-ups," said Mr. Rahman, adding, "They will decide, if necessary."

The price of Brent crude, the benchmark in international oil price, now hovers at around $ 33 per barrel as on March 11, which was over $70 per barrel on January 7, 2020 in the regular futures market.

The BPC was incurring losses before the spread of new coronavirus that causes Covid-19 disease.

The state-owned corporation currently imports around 5.0 million tonnes of diesel, 1.4 million tonnes of crude oil and 200,000 tonnes of furnace oil annually.

The BPC along procures around 85 percent of the country's oil requirement, with the rest by the private sector.

The current retail price of furnace oil is Tk 42 per litre, diesel, kerosene Tk 65 per litre each and octane and petrol is Tk 89 per litre and Tk 86 per litre respectively.

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

Officials said the BPC had racked up hefty profits riding on sharp-fall in oil prices in the international market during 2014-2017.

After 2017, BPC's fiscal status moved ups and downs with the topsy-turvy oil prices.

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

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

Before late 2014, it had incurred a loss of Tk 23.32 billion in FY2013-14 and Tk 48.32 billion in FY2012-13.

In FY2011-12, the loss was Tk 113.71 billion, which was Tk 88.40 billion in FY2010-11.

The BPC had counted losses every year since FY2001-02 until FY2013-14.

Before the spread of coronavirus, oil prices in the international market was witnessing an uptrend due to growing Iran-US tensions over the assassination of Iran's top general Qasem Soleimani.