BPC clears all dues with dollars from private banks

Bangladesh Petroleum Corporation has paid all its dues to foreign suppliers in just two months with the help of private banks.
At the beginning of September, BPC owed overseas suppliers $346 million. By October 29, the corporation cleared all the dues.
BPC officials said the foreign suppliers did not accept Letters of Credit (LCs) opened at private banks. 
But state-owned banks were unable to issue new LCs for the import of fuel due to the dollar crisis in the country since last July.
These banks were also unable to make payments for old LCs. As a result, the BPC’s dues to foreign suppliers skyrocketed.
Some top BPC officials said the corporation owed eight foreign fuel suppliers $406 million until August 12. On August 27, the dues rose to $420 million. Some foreign companies stopped releasing fuel at that time.
The companies from which BPC imports oil are Singapore’s Vitol Asia Private Limited and Unipec Singapore Private Limited, China’s Petro China Limited , Malaysia’s Petco Trading Labuan Company Limited, UAE’s Emirates National Oil Company, Indonesia’s PT Bumi Siak Pusako, and India’s Indian Oil Corporation Limited and Numaligarh Refinery Limited.
As the arrears in the state-owned banks increased day by day due to the dollar crisis, BPC started opening LCs at the private banks with the permission of various ministries of the interim government.
As a result, the private banks were able to supply enough dollars against the LCs and BPC arrears began to decline in early October.
BPC officials said foreign suppliers owed the corporation $346 million at the beginning of September. By early October, BPC’s arrears had dropped to $110 million.
People related to the fuel oil sector said that such incidents are rare in the history of BPC.
BPC Chairman Amin Ul Ahsan told The Daily Star, “We’ve been able to clear the dues quickly because of the cooperation of private banks in opening LCs. Despite having sufficient funds, we were unable to make payments to foreign companies due to dollar shortage in state-owned banks.”
BPC imports 15 consignments of refined oil and one of crude oil, officials said. The corporation needs about Tk 15,000 crore of running capital per month to import various types of fuel oil.
Among the seven private banks where BPC opened the LCs, The Daily Star was able to get in touch with the City Bank.
The bank’s Managing Director Mashrur Arefin said fuel oil imports were hampered when government banks were unable to make LC payments due to the dollar crisis in July and August.
He said the LCs were later opened at the City Bank at the request of Bangladesh Bank Governor Ahsan H Mansur and BPC Chairman Amin.
“We responded to the call of BPC to protect the reputation of the country at critical moments. So far, we’ve issued LCs worth $132 million to BPC,” Mashrur said.
He also said that the bank was in a good position over foreign currencies because of a rise in remittance inflow and export LCs.