Bangladesh gives fuel subsidy to BPC

Struggling with a record trade gap of 1,800 crore taka (US$262.39 million) due in July, the Bangladesh Finance Ministry in June provided a total of 500 crore taka (US$72.88 million) to state-owned Bangladesh Petroleum Corporation [BPC], officials sources said. BPC is struggling to arrange funds for oil import bills due in July due to the increased amount of payment pending for oil imports and other arrears against its static income in oil sales in the domestic market during the last 13 months. In addition, BPC has to make payment arrangements for another 1,000 crore taka (US$145.77 million) to Bangladesh Bank [BB], Islamic Development Bank [IDB] and other arrears. The trade gap of BPC is widening as it is selling petroleum products in the local market lower than its import costs because of the government’s policy of keeping fuel prices stable amidst rising global prices.(June 27, 2008)