Bangladesh stand to lose US$2.5 billion in 2008-09

Bangladesh, which depends fully on imports to meet its oil needs, faces up to US$2.5 billion in losses in the year to June 2009 unless it raises prices to match international market rates, a government official said. Last month the Bangladesh Petroleum Corp. (BPC) proposed to the country’s military-backed interim authority to raise fuel prices between 37% and 80%. The interim government headed by former Central Bank Governor Fakhruddin Amed (which is due to end its tenure following elections planned for next December), is holding back on another sharp increase, apparently fearing a public backlash. The Bangladesh oil, gas and mineral corporation or Petrobangla said it could not pay for natural gas it bought from the international oil companies (IOCs). “We are always very particular to pay their bills. But for the first time we could not pay them last month and also will not be able to pay [bills] for the current month,” said Jalal Ahmed, chairman of the government-run Petrobangla. (June 14, 2008)