BPC profit jumps on global fuel price drop

TBS infograph

After suffering losses for a few months, the Bangladesh Petroleum Corporation (BPC) increased diesel and kerosene prices in November citing a price hike in the global market. Soon after that, the fuel price in the international market started dropping, but the BPC continued charging the increased price and returned to profit.

Since hiking the fuel price locally, the BPC has been posting Tk3.4 crore profit per day.  Currently, it profits Tk2 per litre, which was Tk1.50 last month, said sources at the corporation.

A BPC official said the corporation's profit will increase further this month as the fuel consignments for the existing orders will reach the country throughout the month. 

On 3 November, the Energy and Mineral Resources Division increased the diesel and Kerosene prices by Tk15 (23%) to Tk80 per litre from Tk65, claiming that the BPC registered Tk1,147 crore loss from June to October this year. However, fuel prices in the global market started to drop from 9 November.

Yesterday, West Texas Intermediate (WTI) crude oil price in the global market was $66.26 and Brent Crude oil price was $69.88 per barrel. One month earlier, on 5 November, the WTI crude oil price was $81.27 per barrel and Brent crude was $82.74 per barrel.

Following the global trend, the state-owned organisation BPC yesterday decided to decrease the Jet and Furnace oil prices in the local market, but that will have a little impact on people's lives.

Now the question is when the prices of diesel and kerosene, which is related to the mass people's living expenses, will drop in the local market.

Concerned ministers said the government will move to reduce fuel prices only after the international market becomes stable.

On 1 December, Finance Minister AHM Mustafa Kamal said, "Fuel price is still fluctuating in the international market. Someday the price falls by $20, the next day it goes up by $2."

Asked if the government would consider lowering the fuel price following the downtrend on the global market, State Minister for Power, Energy and Mineral Resources Nasrul Hamid on 29 November said he would take measures to slash fuel prices if BPC makes a proposal in this regard.

On condition of anonymity, the BPC officials said decreasing the fuel price depends fully on the government's decision, though the corporation had applied to the ministry to increase the diesel price last month when it went up in the international market. 

At present, the country consumes around 17,000 tonnes of different types of fuel per day, of which diesel is around 73%. 

According to the Bangladesh Economic Review, the BPC has made a profit of Tk43,000 crore since 2016 by selling fuel at a higher price after importing at a lower rate.