Government makes Tk 73.34 billion profit in oil sales

The government has made windfall profit in oil sales, earning a Tk 73.34 billion profit in the first ten months of the current fiscal year.

The profit is due to the difference between the lower price at which the government buys oil on the world market and the higher price it charges on sales in the domestic market.

According to the Bangladesh Economic Survey 2017, the state-sponsored Bangladesh Petroleum Corporation (BPC) has made Tk 73.34 billion in profits in the July-April period of FY2017. Most of the other 45 public corporations mentioned in the report made losses.

The BPC made Tk 90.4 billion in profits in the twelve months of FY2016 and Tk 4.13 billion in FY2015.

The organisation has become profitable in the past three years after repeated losses in previous years.

The BPC lost Tk 23.32 billion in FY2014 and Tk 48.32 billion in FY2013.

In FY2012, BPC lost Tk 113.71 billion. In 2010-2011 FY, it lost Tk 88.40 billion.

From 2012 to 2016 the global price of oil fell gradually from $105 per barrel to $30 per barrel. Now it is back in the $ 50-60 range.

The Bangladesh government finally decided to decrease the price of domestic oil on Apr 24, 2016, bringing down the price of diesel and kerosene by 4 percent and the price of octane and petrol by 10 percent.

Though Finance Minister AMA Muhith has repeatedly discussed another cut in the price of oil, it has yet to materialise.

“The price of oil has been lowered once,” Muhith told bdnews24.com. “But it was not lowered as much as it should have been. We still have plans to lower the price again after observing the trends in the international market.”

The price of oil on the world market is currently between $55 and $60 a barrel.

According to the economic survey, the improved financial situation of Bangladesh’s public corporations is largely due to BPC’s profitability.