POST TIME: 7 March, 2018 00:00 00 AM
Higher prices in India ‘push diesel, petrol smuggling’

Higher prices in India ‘push diesel, petrol smuggling’

The Bangladesh Petroleum Corporation (BPC) has expressed concern over smuggling of petroleum products to India, as the fuel is much cheaper in Bangladesh than in neighbouring countries. The corporation has requested the Cabinet Division to tighten security on the border to stop the smuggling, saying the country has been losing hugely as diesel and petrol is being sold at a subsidy of Tk. 8 per litre. Sources said the government listed 88 refueling stations along the border that were suspected to be involved in the smuggling of diesel to neighbouring countries. Energy Division sources said the consumption of diesel in January and February jumped by nearly 20 per cent over the December and November 2017 figures. Besides, The demand for diesel was 424,630MT in January and 389,221MT in February this year, while it was 389,866MT in January and 330,522 MT in February last year.

“Suddenly, the lifting of diesel has increased from depots at Parbatipur, Dawlatpur and some depots located near the border. We think our fuel is being smuggled to the neighbouring country, as diesel sells in Kolkata at Rs. 65.86 a litre. If you convert it into taka, the price per litre in Kolkata would be Tk 85.61, as against we our selling price of Tk. 65 per litre. The difference is more than Tk. 20, which is huge for any diesel user,” Mir Ali Reza, director (marketing) of BPC, told The Independent last week. “We have written to the district commissioners (DCs) to save the country’s foreign currency by checking the border area, since we don’t have enough manpower to do that,” he said.

He also expressed anticipation that petrol, too, was being smuggled to India, as the price of petrol was Tk. 86 per litre in Bangladesh and Tk. 97 (Rs. 74.50) in Kolkata.

The BPC found that in January and February last year, the petrol demand was 21,144 MT and 19,686 MT, respectively. In the same months this year, the sale of petrol amounted to 24,434MT and 22,837MT.

The irrigation period begins in December for the Erri-Boro season. Generally, farmers consume 1,200,000 MT of diesel during this time. But this year, the monthwise consumption has gone up.

“This is the time for irrigation, so we cannot stop supplying fuel to any area,” said Mir Ali Reza.

The Energy Division says that in recent months, petroleum product prices have been high in the international market, causing a huge loss to the government.

A recent statement submitted to the Energy Division by the BPC says that owing to the high prices in the international market, the government is suffering losses to the extent of Tk. 8 to Tk. 10 per litre of diesel. Furnace oil and petrol are also draining the national exchequer. So, the BPC suggested a hike in the price of petroleum products to reduce losses and end the smuggling of subsided petroleum products to India.

As the dollar price is at a record high in recent history, it has led to more than anticipated losses for the country.

“Whether people believe it or not, the BPC is currently incurring losses to the tune of Tk. 400 crore every month in importing high-cost fuel and selling it at a lower price,” said an official.

Despite the BPC’s appeal, the Energy Division was not inclined to increase fuel prices right now, as the national election was fast approaching, sources told The Independent.

Bangladesh consumes more than 6,000,000MT of petroleum products, including 4,100,000MT of diesel.

“SInce the amount of diesel is huge, the loss is also big,” the BPC official said. India has started exporting diesel to Bangladesh through the Nowmaligor border. But the amount is nominal.