BPC wants to pay fuel oil price in Rs

Bangladesh Petroleum Corporation (BPC) is looking for an alternative to dollars to pay the outstanding fuel bills. BPC is thinking of paying bills with China in Yuan and with India in Rupees. BPC has already sent a letter to the Ministry of Power, Energy and Mineral Resources proposing to trade with India in Rs.
Earlier, Russia and Bangladesh agreed to use the Chinese currency yuan as an alternative to the dollar for the Rooppur nuclear power plant transaction. A BPC official told Prothom Alo that China has been asked to make a proposal to use yuan to pay the bill for fuel oil imported from China. It is still in its early stages.
For more than a year, regular dollars are not available in the bank to pay the fuel bill. The pressure on foreign oil suppliers to pay outstanding bills is also increasing.

In this situation, BPC has sent a letter to the Ministry of Power, Energy and Mineral Resources on May 11 proposing to trade with India in rupees. It is said that due to shortage of foreign currency dollars in the domestic market and non-supply of dollars as per demand from Bangladesh Bank, it is not possible to pay the import price. A loan takes 25 to 30 days to repay.
BPC has requested the Energy Department in a letter to take necessary measures in coordination with Bangladesh Bank, Ministry of Finance, Prime Minister's Office and other related institutions to continue the import process of fuel oil considering energy security as the highest priority. It is said in the letter that Bangladesh Bank can issue necessary instructions to the banks if they agree to open and pay the loan amount in Indian currency to the state-owned banks. It then has to inform the Central Bank of India. After completion of these works, the Indian oil supply company will be informed about the bill payment in Rs.
BPC said in the letter, 58 thousand tons of diesel will be purchased from Numaligarh from May to December. At the same time, 160,000 tonnes of diesel and 30,000 tonnes of jet fuel (used in aircraft) will be purchased from IOCL.

In this regard, Minister of State for Power, Energy and Mineral Resources Nasrul Hamid told Prothom Alo last Wednesday that the opinion of Bangladesh Bank should be taken in this regard.
BPC says that One Bank, Islami Bank, Eastern Bank, SCB, HSBC have opened loans for fuel oil import but they are not giving it for more than two years.

BPC needs to open 17 to 18 loans to bring 5 lakh tons of refined fuel oil and 1 lakh tons of crude fuel oil per month. Among these, Sonali, Janata and Rupali banks are opening four to five loans in a month. And Agrani Bank is not agreeing to open more than one loan.
A BPC official told Prothom Alo on the condition of anonymity that the bill of about 350 million dollars is outstanding till last April. The foreign companies selling oil to BPC are threatening to stop the supply of fuel oil.

In a letter sent to the Energy Department, BPC said that India's state-owned Indian Oil Company Limited (IOCL) has started supplying fuel oil since last January. They were supposed to deliver five cargo ships by May. But the bill for the two ships fuel supplied earlier could not be paid even after the due date. Because of this they did not deliver the remaining three ships.
BPC has been buying diesel from India's Numaligarh Refinery Limited since 2016. Earlier it was taken through diesel wagons but now it is supplied through the alliance pipeline built between the two countries. On March 18, fuel oil started coming to the country through the pipeline.
BPC said in the letter, 58 thousand tons of diesel will be purchased from Numaligarh from May to December. At the same time, 160,000 tonnes of diesel and 30,000 tonnes of jet fuel (used in aircraft) will be purchased from IOCL. For this it will take 14 crore 72 lakh dollars or 1 thousand 209 crore rupees.
BPC consumes about 6 million tons of fuel oil annually. Out of this, the capacity of the country's only refinery is 1.5 million tons per year. Saudi Arabia and the United Arab Emirates are mainly meeting this demand for crude oil. Apart from this, refined fuel oil like diesel, petrol, jet fuel, furnace oil comes in 45 lakh tons. BPC brings these fuels from Singapore, Malaysia, Indonesia, United Arab Emirates, Kuwait, Thailand, China and India. However, among the different types of fuel oil used in the country, 75 percent is diesel. And 80 percent of diesel is directly imported.
BPC officials say that the diesel import target from India for the next seven months is 14 percent of the total diesel import during this period. However, the government wants to increase the import of diesel from India due to the low cost of transportation.
Mostafizur Rahman, a special fellow at the Center for Policy Dialogue (CPD), a private research organization, told Prothom Alo about the use of rupees or yuan as an alternative to dollars in paying bills. There are several challenges here. First of all, there is the issue of the consent of the central banks of the two countries. After that Bangladesh Bank should have rupees or yuan as required by BPC. There is also the issue of determining the exchange rate of rupees and dollars. Central banks may consider this in a dollar-crisis. But they are not supposed to have too many rupees or yuan. It might pay some bills, but not a lot of big business.