BPC makes good profit on oil

BPC makes good profit on oil

Bangladesh Petroleum Corporation (BPC) said it gained a profit of Tk 15 to Tk 40 per litre by selling various petroleum products. However, ... 4:21 AM

Bangladesh Petroleum Corporation (BPC) said it gained a profit of Tk 15 to Tk 40 per litre by selling various petroleum products. However, sources said the profit margin is much higher.

BPC settled all of its debts to the banks and other financial institutions from the profit it earned on petroleum products after the price fall in the international market. However, the finance ministry has now asked the organisation to return the subsidy it has paid so far.

BPC chairman A M Badrudduja said this amounted to Tk 26,300 crore. If it has to be repaid, the oil price should remain at the current level for at least the next four years. That is why the government is not ready to decrease the oil price. In the meantime, BPC cannot enjoy full benefit of the low oil prices in the international market due to the purchasing procedure. BPC buys oil under the current long term Government to Government (G2G) system. The buying price of BPC has a big difference with the lowest international price because of this system. The government has decided to change the buying system to decrease the gap to the lowest. Now the oil will be brought through open tender instead of the existing G2G system. Half of the oil imported by BPC this year (2016) will be brought under the new system.

Crude oil procurement: BPC procures crude oil only from Saudi Arabia and United Arab Emirates (UAE). The oil price of that country on the day when the oil is loaded on ships is counted as the oil price of BPC. BPC last brought the crude oil on 28 November. Every oil barrel loaded in the ship from Mardan port of Abu Dhabi cost US $ 43.55. Premier of US $ 4.4 will be added with each barrel. Asked about how much profit BPC earns from different petroleum products, after importing refined, and crude oil as well as buying from the local refiners and distributing through the three distribution companies, BPC chairman said the company is earning profit of Tk 40 from per litre octane, Tk 35 from per litre petrol, Tk 20 from diesel and kerosene, and Tk 15 from furnace oil. However, the profit is much higher unofficially. Per litre of the furnace oil is costing Tk 25 imported for the private power plants where BPC is selling the furnace oil to other power plants at Tk 62 per litre. The government paid tax and VAT from that money.
Other than that, BPC last imported diesel on 21 December which was priced Tk 40 per litre including the tax, VAT, and the commission of the distribution company. And it is selling per litre of diesel at Tk 68. But no money was paid back to the finance ministry.
Prothom Alo