Tk 4.0b emergency fund for BPC to manage oil import bill

The government recently paid Tk 4.0 billion to the cash-strapped Bangladesh Petroleum Corporation (BPC) to help it make payment against last month's oil import bills, official sources said.
The finance ministry released the emergency fund as the country's lone petroleum importer and distributor was having problem to meet the oil import bills worth Tk 15 billion for the month of February.
This is for the first time in the current fiscal that the BPC has been provided with funds by the government, in addition to the budgetary provision for the absorption of Tk 70 billion loan liability of the corporation with state-owned banks.
Sources said the finance ministry, which is providing the fund from the 'Investment on Share and Equities' head, attached three conditions before releasing the fund.
Earlier, the BPC sought the financial assistance from the government to maintain the uninterrupted supply of fuel oil after it suffered losses to the tune of Tk 30 billion in the first six months of the current fiscal.
BPC officials, however, said such budgetary assistance is insufficient in the backdrop of growing losses of the corporation due to steep price hike of petroleum products in the international market.
Energy division secretary Mohammd Mohsin had earlier said that they were urging the government to settle the issue of hard term loan worth more than US$500 million offered by two multinational banks to help the BPC finance its oil imports worth $ 3.2 billion in the current fiscal.
Bangladesh Bank has already provided $300 million loan to the BPC. But it is now unwilling to offer any more foreign exchange to avoid pressure on the country's foreign exchange reserve.
According to the energy division officials, the Islamic Development Bank (IDB), the BPC's biggest oil import funding source, is expected to lend $1.2 billion.
BPC will require a further $500 million in addition to the amount being sought under hard-term loans from the multinational banks.