State-owned Bangladesh Petroleum Corporation (BPC) has sought Tk 18,699 crore in government subsidy to cover losses caused by high international oil prices amid the war in the Middle East.
The conflict has disrupted oil shipments through the strategically important Strait of Hormuz, putting pressure on Bangladesh’s energy sector.
BPC has incurred more than Tk 18,699 crore in losses over the past four and a half months by buying fuel at higher international prices while keeping domestic prices below levels indicated by the global market, according to BPC officials.
Since March 2024, Bangladesh has adjusted fuel prices each month under an automatic pricing formula linked to international markets. The Energy and Mineral Resources Division announces revised prices at the beginning of each month.
But the government has kept domestic fuel prices unchanged despite the surge in international oil prices, citing the impact of the Middle East conflict on consumers. This has forced BPC to absorb losses on every litre of fuel sold, officials said.
BPC Chairman Rezanur Rahman said in a letter to the Energy and Mineral Resources Division Secretary on July 23 that the corporation had imported 72 fuel-oil consignments from March through June 23.
The letter said BPC’s losses had reached Tk 18,699 crore during the four-and-a-half-month period and urged the government to provide the amount as an emergency subsidy.
BPC also warned of a severe liquidity crisis. The corporation normally needs working capital of about Tk 15,000 crore to Tk 20,000 crore to maintain fuel supplies, equivalent to roughly two months of imports.
Continued losses have sharply reduced its cash reserves, the letter said, warning that without financial assistance BPC could struggle to make timely payments to banks for letters of credit and fuel imports.
FP/R
