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BPC seeks Tk 1,254cr in outstanding subsidy

Nazmul Ahsan

Bangladesh Petroleum Corporation has made a demand for nearly Tk 1,254 crore from finance ministry as outstanding subsidy amount the corporation provided for marketing petroleum products in the domestic market at prices lower than its procurement costs.
The subsidy amount considered to be loss by the BPC was incurred during the last five years and first quarter of the current financial year due to the government administered prices of diesel and kerosene, said an official letter of power, energy and mineral resources ministry.
Of the Tk 1,254 crore, Tk 807 crore remained unpaid for long by finance ministry that accumulated since 2008-2009 fiscal year to previous fiscal year, while the remaining Tk 446.39 crore in subsidy was incurred during the first quarter to September of the current financial year, the letter, written to the finance ministry on Sunday, elaborated.
‘The amount is not whole of the subsidy related picture the government provides each year against  petroleum products as the finance ministry cleared off Tk 28,503.33 crore in different times as subsidy amount out of  a total demand of Tk 29,314.20 crore for the last five years,’ a senior BPC official told New Age on Wednesday.
‘We need the remaining amount from the government as the money has to be paid to banks as outstanding loans of the corporation,’ the official added.
The government made allocation of Tk 7,950 crore as petroleum subsidy for the current 2013-14 fiscal year and spent Tk 13,558 crore in the same head in 2012-13 fiscal.
The BPC officials said they now incur loss of Tk 10.23 for selling per liter of diesel in the domestic market and Tk 10.17 for a liter of kerosene.
Officials concerned in the finance ministry said the demand by the BPC needs to be thoroughly examined as they had cleared off all outstanding subsidy amount of BPC in cash and bonds.
Meanwhile, the BPC recently sought Tk 2,000 crore on urgent basis to clear loan payment and fuel import bills for the month of December and January.
BPC sought the fund as subsidy despite the government increased fuel oil prices by up to Tk 34 a litre between January 2011 and January 2013.
Of the Tk 2,000 crore, Tk 1,000 will be required for loan repayment to the International Islamic Trade Finance Corporation, member of Islamic Development Bank.
Rest of the fund will be spent for paying the fuel import bills and other expenditures, said a corporation official.
The finance officials, however, said they were taking positive decision on Tk 2,000 crore sought by the loss making BPC.

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