The government has approved Tk 1,000 crore for the fund-crunched Bangladesh Petroleum Corporation to help finance oil imports, a top energy official said Wednesday, reports bdnews24.com

Energy secretary Mohammad Mohsin told bdnews24.com that the finance ministry approved the fund on Monday on condition that the money must be spent only on oil imports.

BPC will have to pay an annual 3 percent interest rate on the loan.

The government in April lent BPC Tk 1,000 crore on the same terms.

The government had earlier rolled out loans through bonds with a 5 percent interest rate.

Mohsin said BPC's "financial condition was miserable", as fuel prices kept rising on the international market.

Oil rose to record $124 a barrel on the international market.

BPC sought Tk 7,000 crore to finance oil imports for June to December.

The state-run petroleum corporation owes Tk 3,200 crore to different banks. In the last fiscal year, BPC had a Tk 3,500 crore deficit because of a wide gap between import bills and subsidised fuel prices.

The government had earlier repaid Tk 5,700 crore in liabilities of BPC to local banks.

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.

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