Despite the long downward trend in the international market, fuel oil prices have not been reduced in the country for six and a half years after April 2016. In this (2014-15 to 2020-21 fiscal year), Bangladesh Petroleum Corporation (BPC) made a profit of about Tk 43,000 crore in seven years. However, from 2021, the prices of all types of fuel oil started increasing in the international market.
Due to this, the price of diesel was increased by Tk 15 in a single jump in October 2021.
In June 2022, the price of fuel oil in the international market reached a record level. As a result, the only importer and marketer of fuel oil in the country faced losses in the 2021-22 fiscal year. As a result, the price of all types of fuel oil was increased to a record level in the country in August 2022.
Although the price of oil started decreasing again in the international market from July of that year. After that, the price of fuel oil in the international market decreased a lot.
However, the price in the domestic market was adjusted only nominally.
In this, BPC made a big profit again in the fiscal years 2022-23 and 2023-24. In total, BPC made a profit of Tk 51,521 crore in years out of the last 10 years from the fiscal year 2014-15. In a decade, the company had incurred a loss of Tk 2,706 crore in the fiscal year 2021-22 alone. In this, BPC’s net profit in 9 years stood at Tk 48,816 crore. This picture was found by analyzing the audited financial reports of the company for the last 10 fiscal years. According to the financial report of the last fiscal year, BPC earned Tk 75,794.51 crore in the fiscal year 2023-24. And the cost of goods sold was Tk 69,847.45 crore. After adjusting other income and expenses, the company made a net profit of Tk 3,943.29 crore in the last fiscal year. Although in the fiscal year 2022-23, BPC made a net profit of Tk 4,586.10 crore. That is, the company’s profit decreased by Tk 642.81 crore or 14 percent in the last fiscal year. However, experts believe that a profit of about Tk 4000 crore on an important product like fuel oil is abnormal.
Analyzing international market data, it can be seen that in January 2021, the price of crude oil in the international market was $54.77 per barrel. After that, it increased every month. In June that year, it reached $75.17. In the following months, the price of crude oil increased rapidly. Although there was a slight decrease for two to three months. As a result, the price of crude oil per barrel in June 2022 reached $122.71. It started to decline continuously from the next month. Despite a slight increase for one or two months, in June 2023, the price of crude oil in the international market reached $74.84 per barrel, which is lower than June 2021. Later, the price of fuel oil fluctuated slightly, but by the end of June 2024, it was around $79.
Meanwhile, in the downward situation, the government faced criticism for raising the price of fuel oil to a record high in the country in August 2022. As a result, the price of fuel oil was slightly reduced in August. After that, the price of oil in the international market decreased, but the price of oil in the country was not reduced further. In the meantime, the International Monetary Fund (IMF) set a condition for removing the subsidy on fuel oil. As a condition of the loan, the organization set a condition for adjusting oil prices with the international market every month.
Although the policy was formulated on the advice of the IMF, its implementation was delayed on the pretext of the national parliament elections. It was thought that if the policy was implemented, BPC’s profit or loss would come down to almost zero. However, in reality, that did not happen. Rather, BPC has maintained its share of profit even in the case of adjustment with the international market. In this, the company is making profit by cutting the pockets of the people as before. After the introduction of the automatic adjustment system, the price of diesel and kerosene was reduced by only 75 paise per liter on March 8. At that time, the price of petrol was reduced by three taka and the price of octane by four taka per liter. In April, although the prices of petrol and octane remained unchanged, the prices of diesel and kerosene were further reduced by two takas and 25 paisa. However, in the next two months, the prices of diesel and kerosene were increased by Tk 1.50 per liter, totaling 75 paisa. And the prices of petrol and octane were increased by five takas in two stages. An analysis of the financial reports of a decade of BPC shows that due to a significant decrease in fuel oil prices in the global market, BPC saw a large profit in the 2014-15 fiscal year. In that fiscal year, the company made a profit of Tk 4,212.02 crore. Although BPC had made a loss for six consecutive fiscal years before that. However, as the price of oil in the international market decreased further, the company’s profit increased to Tk 6,063.32 crore in the next fiscal year. That is, BPC’s profit increased by about 44 percent in the 2015-16 fiscal year.
Due to the low oil prices in the world market, the company’s profit continued in the next fiscal year as well. In the 2016-17 fiscal year, BPC’s profit increased to Tk 8,445.8 million. That is, the profit growth rate in that fiscal year was 32.67 percent. However, despite the high profit, the government faced criticism for not reducing the price of fuel oil in the domestic market. This forced it to reduce the prices of all types of fuel oil on April 25, 2016. As a result, BPC’s profit decreased slightly in the next fiscal year. As a result, BPC’s profit in the 2017-18 fiscal year stood at Tk 6,533.38 million. Then the price of fuel oil increased slightly in the international market. This further reduced BPC’s profit. As a result, the company made a profit of Tk 3,980.64 million in the 2018-19 fiscal year. After that, the price of oil in the world market did not fluctuate much.
However, after the start of the Corona infection, the price of oil in the world market started to decline again. Due to this, BPC’s profit started to increase. As a result, the company made a profit of Tk 5,653 million in the 2019-20 fiscal year. In the middle of 2020, the price of oil in the world market fell to a record level. Due to this, BPC’s profit increased by about 80 percent. However, due to the increase in oil prices in the international market, the company made a loss in the 2020-21 fiscal year. The loss in that fiscal year was Tk 2,705 million. In the next fiscal year, due to the record increase in fuel oil prices, BPC returned from a loss to a profit. At that time, the company’s profit jumped to Tk 4,586 million.
