Middle East Conflict Triggers Huge Losses: BPC Seeks Tk 18,000 Crore Subsidy

Amid soaring international oil prices driven by the conflict in the Middle East, state-run Bangladesh Petroleum Corporation (BPC) has suffered massive financial losses and requested over Tk 18,000 crore in subsidies from the government.

Due to buying fuel at high prices from the international market while selling it at lower rates domestically, the corporation incurred losses exceeding Tk 18,699 crore in the last four months alone.

According to BPC sources, the government had been adjusting fuel prices regularly since March 2024 using an automatic pricing formula aligned with global market rates. Under this system, the Energy and Mineral Resources Division issued notifications at the beginning of every month to fix new prices.

However, when conflict broke out on February 28 this year, global fuel prices began rising rapidly. At that time, the government opted to keep domestic prices unchanged through March and early April, before eventually raising fuel prices across all categories on April 19.

Officials from BPC confirmed that an official letter detailing the severity of the crisis and financial damage was sent to the Secretary of the Energy and Mineral Resources Division on July 23. Signed by BPC Chairman Rezanur Rahman, the letter stated that BPC imported a total of 72 parcels of refined fuel between March and June 23.

During this four-and-a-half-month span, BPC's total loss mounted to Tk 18,699 crore. To manage the ongoing crunch, BPC urgently requested the government to allocate this amount as a subsidy.

Highlighting BPC's severe liquidity crisis, the letter added that to ensure uninterrupted domestic supply, the corporation must maintain working capital equivalent to two months of imports around Tk 15,000 to 20,000 crore. However, continuous operational losses have drained BPC's cash reserves.

The letter warned that without immediate financial assistance, BPC will be unable to clear import payments or settle Letters of Credit (LCs) with banks on time.