-In FY 2023-24, retained income of BPC will be Tk 30K crore
-97pc fuel used in four sectors. 58.21 pc in transportation, 15.50pc in agriculture, 17.74 pc in power and 5.63 pc in industry
- Products price, price hike depends on fuel price
The state-owned company Bangladesh Petroleum Corporation (BPC) is earning a huge amount by increasing the price of fuel. The retained earnings of the company can stand at Tk 30 thousand crore. However, even five years ago the company was incurring huge accumulated losses. But due to increasing the price of fuel, the profit of the company started to accumulate from 2020. At the end of the financial year 2023-24, the retained earnings of BPC may stand at Tk 30 thousand crore. This information is known from sources related to Ministry of Power, Energy, and Mineral Resources (MPEMR).
According to the relevant sources, in the first two months of the current financial year, the government's expenditure on opening of LCs for the import of fuel has also decreased by 36 percent. And there is no announcement from the government to reduce the price of fuel yet. In the financial year 2018-19, the company had an accumulated loss of Tk 14,907 crore. In the next fiscal year 2019-20, the company was able to save Tk 7 thousand 582 crore after overcoming losses. Since then, the retained earnings of BPC have increased every year and stood at Tk 27,895 crore at the end of FY 2022-23. In the budget of the current financial year, it has been estimated that the profit after tax of BPC in the financial year 2023-24 could be Tk 3 thousand 841 crore. As a result, at the end of the last financial year 2023-24, the retained income of the company is likely to stand at Tk 30 thousand crore.
According to sources, BPC is currently in the best financial position among state-owned enterprises. The previous government made a law to deposit surplus funds of self-governing bodies in the public treasury. Under that Act, BPC has deposited Tk 11,500 crore in the government treasury from 2019-20 to 2022-23. However, the organization did not deposit any money to the government in the financial year 2023-24. In FY 2023-24, BPC imported fuel worth Tk 55,738 crore. Out of this refined fuel was Tk 9 thousand 385 crore. And Tk 46 thousand 352 crore are spent on unrefined fuel. In the last financial year, BPC sold 67 lakh 27 thousand 601 tonnes of fuel oil, which is 8.42 percent less than the previous financial year 2022-23.
Sources also said that in the first two months (July-August) of the current financial year 2024-25, BPC's expenditure on fuel import has decreased compared to the previous financial year. In those two months, the cost of opening LCs for fuel imports was 1.25 billion dollars, which is 36.20 percent less than the same period of the previous year. Apart from opening of LC, the cost of settlement of LC also decreased during that period. LC settlements in July-August of the current financial year were $1,330 million, which is 20.14 percent less than the corresponding period of the previous financial year. The cost of opening LCs has come down mainly due to the fall in fuel prices. However, in the current fiscal year 2024-25, there is a plan to buy fuel of 73 lakh 12 thousand tonnes. Out of this, 44 lakh 80 thousand tonnes on G2G basis and 28 lakh 32 thousand tonnes on open system.
In the first week of August this year, crude oil prices started to fall in the international market. Crude oil prices fell to $66 per barrel in the first week of September as the price continued to decline. Iran-Israel and Lebanon conflict took a new level, the price of crude oil rose above 78 dollars. The upward trend of crude oil continues. Meanwhile, according to fuel experts, the country has been in high inflation for more than two years. The life of the common people is becoming difficult due to the increase in commodity prices. Various measures taken by the government to control inflation are not playing a very effective role. Fuel plays an important role in commodity prices. 97 percent of fuel is used mainly in four sectors in the country. Out of this, 58.21 percent of fuel is used in transportation sector, 15.50 percent in agriculture sector, 17.74 percent in electricity and 5.63 percent in industry. These four sectors are important in determining product prices. In such a situation, if BPC reduced the price of fuel, it would have helped to control the price of the product. But in BPC's fuel automatic pricing process, a total of 10 types of costs are captured. BPC's development fund, marketing company's margin, transport fund, dealer agent commission etc. are involved in reaching this oil from the refinery to the consumer level. BPC also adds huge profit margins to this. It is questionable how reasonable and ethical this profit margin is after the government imposes VAT-tax and ancillary costs on the fuel oil consumer. Because the previous government adjusted the price of fuel from March-June this year in line with the international market. The automatic pricing formula has some degree of fluctuation in prices per liter of diesel-kerosene, petrol and octane. But after assuming power, the interim government abolished gas-electricity price fixing. The authority has decided that fuel price determination will be stopped for the time being.
In this context, BPC chairman Md Amin ul Ahsan said that LC is not always the same throughout the year. It stays a little less at the beginning. Moreover, communication continues to maintain regular contact with the suppliers of oil imports. A couple of cargo imports may have been delayed by as much as a week. There is no shortage of fuel reserves. The policy under which BPC conserves fuel reserves continues. Recently BPC has been doing fuel LCs with private banks, which is more than usual. Recently BPC has been doing fuel LCs with private banks, which is more than usual. LCs is being opened in private banks to reassure suppliers. In the past two months, crude oil prices have been at a bearable level, a reversal happened due to unrest in the Middle East. As a result, downward projections show the opposite picture. BPC has informed the government about the price of fuel in the international market. The decision taken by the government will be final.
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