The Bangladesh Bank (BB) has provided US$31 million to State-owned Commercial Banks (SCBs) to finance Bangladesh Petroleum Corporation (BPC) for paying imported fuel oil bills.

Sonali Bank Limited alone received about one third of the greenbacks released recently, according to sources.

The central bank has so far released $380 million to the state-owned banks in the first quarter of the current fiscal.

The SCB’s have been refusing to foot the oil import bills in favour of cash strapped Bangladesh Petroleum Corporation (BPC) which is incurring loss by selling petroleum products at rates lower than imported prices.

Especially, the BPC is facing fund crisis for supplying furnace oil for the country’s costly power plants.

The BPC is scheduled to repay loans to Islamic Development Bank (IDB) in every six months and the government would repay $300 million loan within this month, official said.

However, the pressure has been mounted on the BPC to procure additional petroleum fuels to meet the domestic requirement.

A senior official of the Bangladesh Bank said the SCB’s like Sonali, Janata and Agrani and Rupali banks are in serious cash crunch. He, however, said the banks would purchase dollars from inter-bank money market to meet dollar demands.

“Considering this, the central bank has utilised its reserves to pay petroleum products bills,” he said.

The BB has so far sold dollar worth $147 million to the state-owned banks during the last three and a half months with an exchange rate of Tk 75.86 per dollar. However, the BB has lent dollar to the banks for limited time.

According to the Bangladesh Bank sources, the BB would provide dollar to BPC from its reserved if the corporation fails to identify alternative sources to pay its import bills.

This would create additional pressure on the Bangladesh Bank reserve, official feared.

The BPC is now seeking loan from different countries to pay IDB loans. The reserve of the BB was $1.13 billion on Monday, according to Bangladesh Bank.

News: Daily Sun/ Bangladesh/ 19-Oct-2011