Losses on diesel sales have increased to Tk 24 per litre after international oil prices spiked to $130 a barrel Monday, the highest in 13 years, according to Bangladesh Petroleum Corporation (BPC).

But the BPC had to count a loss of Tk 8.72 per litre in February and Tk 5 in January. Losses on furnace oil used by power plants have also been increasing and now stand at Tk 11 per litre.

“Losses on diesel and furnace oil sales have been ballooning because of the price spiral in the international markets,” said BPC chairman ABM Azad. Amid this situation, he said if the trend continues, there will be no option for them other than hiking the price in the local market again.

According to a senior official, BPC’s losses were around Tk 20 crore per day till last week. But now it has shot up to Tk 35 crore a day as the global commodity markets are heating up, centring on the Russia-Ukraine war.

Based on that calculation, BPC’s monthly losses balloon to over Tk 1,000 crore per month. Also, BPC’s concern grows as it is not getting required money from the finance ministry. “We have sought Tk 5,000 crore from our funds transferred to the national exchequer. But the finance ministry has given us only Tk 1,000 crore,” said a senior BPC official requesting not to be named.

BPC made hefty profits in 2020 and the first half of 2021 when the oil prices in the global markets were low because of subdued demand amid the onslaught of the coronavirus pandemic. At that time, BPC deposited Tk 10,000 crore to the government exchequer and now the corporation is begging for money.

Just two days ago Saudi oil giant Aramco increased prices for its Arab Light crude for delivery to Asia to $4.95 per barrel to make it costlier than the price of Oman and Dubai crude, according to a Business Insider Bangladesh report.

Aramco took the decision at a time when the world’s energy supply chain has been severely disrupted due to the Russia-Ukraine war for the last 13 days.
The issue has appeared as a bane for Bangladesh which imports most of its crude oil from Aramco.

BPC imports two grades of crude oil for producing different types of petroleum products through processing it at state-owned Eastern Refinery Limited in Chittagong. These are: Arabian Light Crude Oil (ALC) and Murban Crude Oil (UAE).

According to BPC data, the country imported over 14.25 lakh tonnes of crude oil in 2021. Of the quantity, nearly 7.97 lakh tonnes or 56 percent were from Aramco and the remaining 44 percent from the United Arab Emirates.

The price hike comes as no surprise the market is getting further heated up as Russia, a major supplier in Europe, has been intensifying its attack in Ukraine that began on February 24. Western countries’ sanctions on major Russian banks and energy companies made many buyers worried about sourcing oil from Russia.

Earlier last week, OPEC, a forum of oil-producing countries, decided not to increase daily outputs from the existing four lakh barrels per day. Amid this situation, crude oil prices in global markets surged to $130 per barrel and the price of natural gas hit a new record.