The government has approved the proposal of borrowing $2 billion hard loan from Islamic Trade and Finance Cooperation (ITFC) for importing petroleum fuels, a senior official said.

The hard-term loan committee of the government on Sunday approved the BPC proposal to borrow the loan from ITFC, an autonomous entity of the Islamic Development Bank (IDB). Finance Minister AMA Muhith chaired the meeting.

Bangladesh Petroleum Corporation (BPC) chairman Md Abu Bakar Siddique on Sunday said the BPC has no bar to borrow $2 billion loan from ITFC.

“We received $1.48 billion loan from the ITFC during last calendar year and increased the loan amount by $0.52 billion this year,” he said adding the government would require around $4.5 billion to procure about 6.8 million tonnes of petroleum fuel this year.

“IDB loan would help us a lot as the BPC faces complexity due to internal dollar crisis,” Bakar said.

He said the energy and mineral resources division has sought finance minister’s intervention to open letter of credit (LCs) to procure fuels in time.

“Banks are reluctant to open LCs by purchasing dollar at high prices,” the BPC top official said.

Another official of BPC said two state-owned commercial banks—Janata Bank Limited and Agrani Bank Limited—recently are delaying to open LCs causing hindrance to purchase of petroleum fuel from Kuwait Petroleum Corporation (KPC) on time.

It’s really impossible to meet local demand if dollar shortage continues,” he said.

He said the BPC is also counting huge loss for delay in opening LCs.

Recently, KPC has threatened BPC to stop supply of petroleum fuel due to delay in payment, concerned official said.

Last month the ITFC assured Bangladesh of providing $2 billion with interest rate of five percent, 0.30 percent lower than that in last calendar year.

The Daily Sun/Bangladesh/ 16th Jan 2012