BPC says it can’t afford any more losses. Not everyone is convinced
With a historic fuel price hike this week, CPD’s Executive Director Dr Fahmida Khatun argues that BPC should use the profits it made in the past years during this crisis period and relieve people from suffering
Amid the fear of chain reactions of the recent unprecedented fuel price hike on the economy, the Bangladesh Petroleum Corporation's (BPC) Chairman ABM Azad, on Wednesday, said the state-owned company could not afford to incur any more losses after failing to turn a profit in the last six months - although in the last seven years, BPC made huge profits cashing in on low fuel prices in the international market.
Riding on this fact, research institute Centre for Policy Dialogue (CPD) said on the same day that the record hike in fuel oil prices could have been avoided with the help of the profits BPC made.
"BPC should use the profits it made in the past many years, during this crisis period. Why should they impose the loss on the people!" Dr Fahmida Khatun, CPD's executive director, told The Business Standard.
"When BPC makes profit, it does not share it with the public, it does not reduce the price," she added.
According to earlier reports, BPC made a profit of around Tk47,000 crore in the last seven years by selling fuel to consumers at prices higher than in the global market.
Market will always fluctuate. But BPC is not allowing the consumers to benefit from market fluctuation - when the price is falling, consumers don't get to buy fuel at the reduced price.
The BPC chairman, however, said that there was no information about the profit of Tk47,000 crore. He said its profit after tax from 2014-15 to 2020-21 was Tk 42,993 crore.
From this profit, the company gave surplus funds to the government, spent on various development projects, and paid taxes, etc. Now, as of 7 August, BPC Chairman told the press, the company has Tk19,882 crore in its various accounts, including fixed deposits.
He also said BPC will spend almost all of its over Tk19,000 crore money on customs duties and fuel oil import in the next two months, implying that the company does not have the kind of money needed for subsidising fuel price further.
CPD's executive director, however, had a different view.
"Our calculations say, they are making profit at this point of time after paying all the taxes, LC margin and other costs and charges, because fuel prices have fallen in the international market," Khatun said.
"Also, BPC gave the government Tk10,000 crore from its profits. It should ask the money back from the government. The government should also mobilise money from other sources so that the people don't have to suffer. The fuel price hike is triggering a chain effect on the whole economy," she added.
Khatun said the fuel price hike is totally unfair and unreasonable.
"We have not recovered from the Covid-19 losses, on top of that we are suffering from high inflation," she lamented.
"Why are they putting this extra pressure on people? What is the role of the government? The role is to make the lives of people easier," Khatun continued. "Market will always fluctuate. But BPC is not allowing the consumers to benefit from market fluctuation - when the price is falling, consumers don't get to buy fuel at the reduced price."
Dr Fahmida Khatun also said the government should remove capacity charges to power plants, terming it a total waste of government resources. She suggested that instead of hurting the economy by hiking fuel prices and putting more pressure on people - poor and rich alike - the government should save money through austerity measures. Reducing the high taxes on fuel prices could also be thought to ease the pressure.
The BPC Chairman, of course, said, on Wednesday, that the decision to reduce taxes falls under the government's jurisdiction, and BPC can do nothing about it.
