The New Nation - Internet Edition

Shamim Jahangir

The government is going to import nearly 12 lakh tonnes of petroleum products from four countries by June to meet the local demand.

Of the petroleum products, the Government will import 10 lakh tonnes of diesel and 1.90 lakh tonnes of jet fuel and octane, a senior official of the Bangladesh Petroleum Corporation (BPC) told the New Nation yesterday.

"We have already prepared a draft to purchase 1.20 lakh tonnes of diesel from the Maldives this month," he said. He added that the Energy Division will place a draft to government purchase committee to procure the amount of diesel on Thursday next.

After getting purchase committee approval, we will move forward, he said.

"We will proceed further to procure five lakh tonnes of diesel from Malaysia, 4.80 lakh tonnes from Kuwait and 90,000 tonnes from the Philippines," he further said.

The government will also purchase 1.90 lakh tonnes of jet fuel and 50,000 tonnes of octane from the same countries, he said.

Last month BPC wanted to utilise Tk 3,475 crore ($500 million) idle money of Bangladesh Bank (BB) as long term soft loan to meet petroleum demand this year. But the Energy Division is yet to get any response from the Ministry of Finance in this regard.

"We need $2,500m to $3,000m to procure 36.50 lakh tons of petroleum fuel this fiscal," a senior official of the Energy Division told The New Nation.

"We have imported petroleum fuel on 6 per cent interest rate and .07 per cent administrative fees from International Islamic Trade and Finance Corporation (IITFC), the MoPEMR said in a letter said.

BPC has been facing trouble to open letter of credit (LC) as it is a lengthy process to borrow loan from the IITFC, the letter said.

"If Bangladesh Bank could ensure the long term soft loan, it would be possible to ensure diesel supply in ongoing Boro season," it said.

"We have sought $1,400million soft loan to Islamic Development Bank for next three months," another official of the Ministry said. If the Bangladesh Bank could ensure us to endorse $500m long term soft loan, BPC would reduce its loan from IITFC.

"BPC will utilise BB idle money and in the process the government would also be benefited," he said. BPC has been paying Tk 900 crore as interest to the International Islamic Trade and Finance Corporation (IITFC) and state-owned banks every year.

The BPC has incurred a loss of Tk 18,509.85 crore in 2008-09. Due to frequent loss by importing petroleum products, the BPC has been facing financial crisis to import the petroleum fuel this fiscal, sources said.

Bangladesh Bank had endorsed $300 million in 2007-08 session in response to BPC request for procuring petroleum products, he said.