Bdnews24.com

Bangladesh Petroleum Corporation has sought Tk 7,000 crore from the government to finance oil imports for June-December, BPC chairman Anwarul Karim said Friday.

Karim told bdnews24.com that the corporation had sought the money to cope with a feared fund crunch during the period.

The government had approved Tk 1,000 crore on April 20 in loan for the troubled BPC to help meet its immediate crisis worsened by the rising costs of oil imports.

But the troubled state-owned entity had missed out on Tk 7,000 crore at the time in "rolling funds" as Bangladesh Bank refused to release the funds from its reserves.

The state-owned petroleum corporation is uncertain over loans from foreign banks to buy fuel.

"The BPC will run a Tk 7,000 crore deficit even after paying from its own funds," he added.

A proposal for the money was sent to the energy ministry last week. The BPC sent a copy to the finance ministry too.

Energy secretary Mohammad Mohsin told bdnews24.com: "A proposal of Tk 7,000 crore for the BPC has been prepared. It will be sent to the finance ministry soon."

The government will have to approve the proposal or the BPC will have to take loans, said a senior BPC official, asking not to be named.

He said the spiralling prices of fuel on the international market had left the BPC in an "awful financial situation".

Oil raced to a new record high above $125 a barrel Friday, as a strong performance over the last week and a surge in heating oil futures saw investment funds trooping into the market.

According to the BPC, the government pays Tk 35 in subsidy for a litre of diesel and Tk 34 for kerosene. The BPC made profit by selling octane before. But it is now giving subsidy for octane too.

The BPC chairman said that the BPC would have to run into more than Tk 11,000 crore in deficit by the year-end if the situation continued.

The BPC has a stock of diesel for 25 days. On May 11, 30,000 tonnes crude oil would arrive in Bangladesh from Kuwait Petroleum Corporation.

The BPC chief said that there was no progress with any loan other than the $300 million from Islamic Development Bank.

Standard Chartered Bank was yet to agree to give loans on government conditions.

The government offered to pay a 1.7 percent interest rate plus the London Inter-bank Offered Rate on the loan, but the SCB demanded 2.75 percent interest plus LIBOR.

The loan from France-based BNP Paribas was also uncertain.

The government sought $20 crore from BNP Paribas in April, but the company did not respond to it.