Bangladesh Petroleum Corporation is set to log in profit of Tk 12,186 crore for fiscal 2015-16, which is three times more than in the previous year, in spite of the recent price cuts, according to the finance ministry’s provisional estimate.
After five consecutive years of losses, BPC last year made a profit of Tk 4,126 crore.
The fuel price has been on a slide since June 2014 in the international market but Bangladesh did not adjust it domestically, which contributed to the profit.
The government made some price adjustments recently in response to the demand of economists and businesses, but there is still a big discrepancy between the international and local prices.
On March 31, the government cut the price of furnace oil, mostly used by industries and power plants, by more than 30 percent to Tk 42 a litre.
Then on April 24, the government brought down the prices of octane and petrol by Tk 10 a litre and diesel and kerosene by Tk 3 per litre.
Despite the cuts, the BPC will still make profit of Tk 23 to Tk 28 per litre of petrol and octane and about Tk 16 in diesel and kerosene.
However, Finance Minister AMA Muhith hinted at another round of price cuts.
“Reduction in fuel prices is an ongoing process,” he told reporters during his post-budget briefing on Friday.
He has already consulted the issue with the prime minister as she is in charge of the energy ministry. “It should be taken into consideration that the crude oil price is rebounding,” Muhith added.
Alongside BPC, another state-owned enterprise Bangladesh Road Transport Corporation will make a handsome profit of Tk 4,044 crore this fiscal year.
However, the amount is slightly lower than last fiscal year’s Tk 4,176 crore.
On the basis of information up to April, it appears that 34 of the 46 state-owned enterprises are on course to logging in profits for the fiscal year, according to Bangladesh Economic Review 2016.
Another enterprise that will make big profit is Bangladesh Oil, Gas & Minerals Corporation, which is also known as Petrobangla, — of about Tk 926 crore. “On final count, the amounts may become bigger,” said a finance ministry official.
For instance, it was projected in last fiscal year that Petrobangla would count profit of Tk 815 crore but the amount turned out to be Tk 1,109 crore in the end.
On the other hand, 11 state-owned enterprises are projected to suffer massive losses in fiscal 2015-16, led by the Bangladesh Power Development Board.
BPDB’s losses this year are estimated to be Tk 6,233 crore, down from last fiscal year’s Tk 7,276 crore.
BPDB has been a loss-making concern since fiscal 2007-08, according to statistics.
“BPDB suffers losses as it sells electricity to consumers at a price lower than the one it purchases at,” said the official.
And in recent times, it has been purchasing power from quick rental power plants at a much higher rate, he added.
But for this, the finance division has been giving a large amount of subsidy every year.
In recent times, BPDB’s losses are getting smaller on the back of the decline in fuel prices in the international market.
This fiscal year, Tk 8,000 crore was allocated for subsidy but it was slashed by Tk 2,000 crore in the revised budget.
SOURCE DAILY STAR