At the import stage, diesel generates the highest amount of government revenue among individual commodities. According to National Board of Revenue (NBR) data, Bangladesh Petroleum Corporation (BPC) paid Tk 112.28 billion in duties and taxes to the government on diesel imports alone in the last fiscal year.
The figure is even larger when all types of fuel are taken into account. According to BPC data, the corporation paid the government around Tk 1.19 trillion in duties and taxes on fuel imports over the 10 years from fiscal 2016-17 to 2025-26.
Despite paying this huge amount in duties and taxes, BPC remained profitable for most of that period. According to audited accounts for fiscal 2014-15 to 2024-25, the corporation recorded a loss in only one year. Excluding that loss, it posted net profits of Tk 531.32 billion over the remaining 10 years.
Adding the two figures—duties and taxes and profits over the 10-year period—gives a total of Tk 1.72 trillion. Ultimately, this money came from revenue earned by selling fuel to consumers.
During the tenure of the Awami League government, which was ousted in the July mass uprising, and the interim government, domestic fuel prices were not reduced in line with declines in global prices. The global market began becoming volatile after the BNP government took office.
On 18 April, diesel prices were raised by Tk 15 a litre to Tk 115. Last Sunday, they were increased by another Tk 20 to Tk 135. At the same time, kerosene was priced at Tk 155, petrol at Tk 160 and octane at Tk 165 a litre. The new prices took effect on 21 September.
On the issue, State Minister for Power, Energy and Mineral Resources Aninda Islam told Prothom Alo that although prices in the international market had risen, the government had been reluctant to raise domestic prices, taking people’s difficulties into consideration.
But because of BPC’s declining financial capacity, the need to maintain regular supplies and the risk of smuggling arising from price differences with neighbouring countries, the government ultimately raised prices, he said.
But questions have been raised about why the government continues to impose such high rates of duties and taxes on fuel.
Losses in only one year
According to BPC’s audited accounts, the corporation incurred a loss of Tk 27.05 billion only in fiscal 2021-22 during the period from fiscal 2014-15 to 2024-25. It made profits in all other years.
BPC said it also incurred a loss in the recently ended fiscal year, although its audited accounts have not yet been published. According to the corporation’s preliminary estimate, it incurred a shortfall of around Tk 228.75 billion from March to August because it bought fuel at high international prices and sold it domestically at controlled prices.
BPC said it no longer has the full amount of its earlier profits. Around Tk 340 billion of its profits from fiscal 2014-15 to 2024-25 was deposited into the government treasury. Money was also spent on development projects and operating expenses.
BPC chairman Md Rafiqul Islam told Prothom Alo that the corporation had around Tk 370 billion in hand on 1 March. Since then, it has had to pay various liabilities, including fuel import bills.
He further said that some of BPC’s funds are stuck in weak banks, while some money has been earmarked for various projects. At present, around Tk 115 billion is available for fuel imports.
The corporation may face a shortfall of around Tk 15 billion in arranging funds for 40 letters of credit, he added.
Cost reaches Tk 177 by the time fuel reaches consumers
BPC unloaded around 131.3 million litres of diesel this month. According to data from Chattogram Customs House and Banglabandha Land Customs, the average import cost of diesel up to the port was Tk 126.41 per litre.
After adding around Tk 33 a litre in duties and taxes, the cost rose to Tk 159.41. An additional Tk 17.27 per litre is spent on operating costs, transportation, dealer commissions, development funds and other expenses between the port and consumers. The total cost therefore comes to around Tk 176.68 per litre.
At the current selling price of Tk 135, BPC faces a shortfall of around Tk 42 per litre on these consignments. Of this amount, around Tk 33 represents government duties and taxes. Excluding duties and taxes, the shortfall compared with import and other costs is around Tk 9 per litre.
However, BPC chairman said the current cost of diesel, including international prices, duties and taxes and other expenses, is around Tk 205 per litre. Before the latest price increase, it was being sold at Tk 115. That meant a shortfall of around Tk 90 per litre. The shortfall is therefore still Tk 70 per litre.
BPC now seeks subsidies
Around Tk 340 billion of BPC’s profits was deposited into the government treasury over the past decade. Now, under financial pressure, the corporation is instead hoping to receive around Tk 50 billion in subsidies from the government.
The BPC chairman said the amount of subsidy required would fall somewhat as a result of the fuel price increase. At the same time, revenue from fuel sales would be used to finance new imports, he said.
How much scope was there to ease the pressure?
Questions have also been raised about whether there was an opportunity to reduce duties and taxes instead of raising fuel prices. The state minister said the matter had been discussed with the relevant authorities.
According to him, if there had been an opportunity to reduce taxes, the relevant authorities would certainly have done so. Since that did not happen, he said, it has to be assumed that there was no such opportunity.
Khandaker Golam Moazzem, president of Knowledge Hub Institute Trust, told Prothom Alo that a large portion of BPC’s profits had been transferred to the government treasury. Returning some of that money to BPC during the crisis could have eased the pressure on consumers, he said.
In Khandaker Golam Moazzem’s view, BPC should essentially be operated as a service-oriented organisation under a “no profit, no loss” model. At the same time, an independent audit meeting international standards is needed to improve transparency in operating expenses. This is because when fuel prices rise, the impact is not confined to transport; it raises production, agricultural and goods-transportation costs, ultimately putting greater pressure on consumers.