In January, the International Monetary Fund approved loans of $4.7 billion for Bangladesh
\n DHAKA
\nBangladesh is struggling to pay for imported fuel because of a dollar shortage, letters reviewed by Reuters show, with the state petroleum company owing more than $300 million as it faces an \u201calarming decrease in fuel reserves.\u201d
\nAll import and marketing of fuel in the country of nearly 170 million people is controlled by Bangladesh Petroleum Corp. (BPC), which has asked the government to permit domestic commercial banks to settle dues with India in rupees.
\nThe South Asian nation\u2019s dollar reserves have shrunk more than a third since Russia\u2019s invasion of Ukraine in February last year to stand at a seven-year low of $30.18 billion by May 17.
\nHeavily reliant on energy imports, Bangladesh is grappling with power cuts resulting from a fuel shortage that have badly hurt its exports-oriented garments industry.
\n\u201cDue to a shortage of foreign currency\/dollars in the domestic market and the central bank not meeting demand for US dollars, commercial banks are unable to pay for imports on time,\u201d BPC told the power ministry in a May 9 letter reviewed by Reuters.
\nThat followed a warning in a letter in April that said, \u201cIf it is not possible to import fuel according to the import schedule prepared for May, supply may be disrupted throughout the country with an alarming decrease in fuel reserves.\u201d
\nThe ministry, BPC and the central bank did not immediately respond to telephone calls to seek comment.
\nBPC imports 500,000 tons of refined oil and 100,000 tons of crude oil every month.
\nThe April letter said several fuel suppliers had either sent fewer cargoes than scheduled or threatened to halt supplies.
\nCreditors included Unipec, the trading arm of China\u2019s state-owned Sinopec, Vitol, ENOC, Indian Oil Corp. Ltd. (IOC), PetroChina and Indonesia\u2019s BSP, it said.
\n\u201cSeveral companies are threatening to stop supplies while others are sending fewer cargoes than planned,\u201d said a BPC source who sought anonymity to speak on a sensitive issue.
\nBPC will have to pay $41.1 million this year for diesel to India\u2019s Numaligarh Refinery Ltd, majority owned by Oil India Ltd, while IOC is owed $147.2 million for diesel and jet fuel, the May letter showed.
\nBPC asked the government to allow Bangladesh\u2019s nationalized commercial banks to settle dues with Indian companies in rupees.
\nIn September, Reuters reported that State Bank of India had asked exporters to avoid settling deals with Bangladesh in dollars and other major currencies as its reserves fell, favoring instead the taka and rupee currencies.
\nFor years, Bangladesh\u2019s $416-billion economy has been one of the world\u2019s fastest growing, but rising prices of energy and food because of the war have inflated its import bill and the current account deficit.
\nIn January, the International Monetary Fund approved loans of $4.7 billion for Bangladesh. Others in South Asia, such as Sri Lanka and Pakistan, have also sought or received IMF funds this year.<\/p>\n","protected":false},"excerpt":{"rendered":"
In January, the International Monetary Fund approved loans of $4.7 billion for Bangladesh DHAKA Bangladesh is struggling to pay for imported fuel because of a dollar shortage, letters reviewed by Reuters show, with the state petroleum company owing more than $300 million as it faces an \u201calarming decrease in fuel reserves.\u201d All import and marketing […]<\/p>\n","protected":false},"author":2,"featured_media":332875,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-332857","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n