Middle East war causes huge losses, BPC seeks Tk 18,000 crore subsidy

The state-run Bangladesh Petroleum Corporation (BPC) is facing substantial financial losses as fuel prices have risen in the global market amid the ongoing war in the Middle East.

To cope with the situation, the corporation has sought more than Tk18,000 crore in subsidies from the government.

As the country’s sole state-owned agency responsible for importing, storing and distributing petroleum products, BPC’s financial performance is directly linked to fluctuations in the international market.

BPC had enjoyed consecutive years of profits as global oil prices remained relatively low.

However, following the outbreak of the Iran-US war on February 28 this year, international fuel prices began to rise while domestic prices were initially kept unchanged.

The government later raised the prices of all types of fuel oil on April 19. Before that, BPC had reported losses of around Tk104 per litre on diesel and Tk32 per litre on octane, estimating that it would require Tk30,561 crore in subsidies.

BPC’s losses have continued as crude oil prices, vessel fares, insurance and transportation costs have increased due to disruptions to oil tanker movement through the Strait of Hormuz.

However, the corporation recorded a net profit of Tk4,216 crore in the 2024-25 fiscal year, Tk273 crore higher than the previous fiscal year.

During that year, it spent around Tk50,195 crore to import more than 6.2 million tonnes of fuel oil.

According to BPC data, the price of diesel stood at $86 per barrel before the war, rising to $120 in June.

Similarly, the price of octane increased from $73 to $104 per barrel. As a result, BPC incurred a total loss of Tk18,699 crore over the four months from March to June.

Based on this, the Ministry of Power, Energy and Mineral Resources sent a letter to the Ministry of Finance on July 28 seeking a subsidy.

BPC General Manager of the Finance Division Muhammad Morshed Hossain Azad said the corporation has yet to receive a response to its subsidy request, but expects a positive response.

He added that from the time price adjustments began until the outbreak of the war, BPC paid Tk71,000 crore to the government in taxes and VAT, along with Tk11,500 crore to another fund.

The corporation has also kept the fuel supply system operational using its accumulated profits.