Bangladesh Petroleum Corporation (BPC) will have to pay an additional Tk 8,000 crore in the current fiscal year following a policy shift in the fuel import duty structure.
As an immediate step, BPC on Monday paid Tk 700 crore to the National Board of Revenue (NBR), with the remaining amount to be adjusted in phases, officials confirmed.
Why BPC Faces a Sudden Cost Surge
Until recently, BPC paid import duties based on a fixed “tariff value,” irrespective of fluctuating international oil prices. This meant that when global prices increased, BPC’s duty payments remained unchanged. While the NBR calculated duties based on the actual invoice value, BPC had continued to use the tariff value system.
Private sector importers, including Bashundhara, Partex, and AK Khan, have long advocated for the invoice-based method. These firms benefit by maximizing revenue through the sale of by-products like condensate and bitumen—while BPC bears additional cost burdens under the new duty regime.
Strategy to Offset the Impact
BPC Chairman Amin Ul Ahsan acknowledged that the shift to invoice-based valuation will increase BPC’s costs. To mitigate the impact, the government has reduced fuel import duties in the national budget for FY2025–26.
However, to offset this impact, the government reduced import duty rates in the latest budget. Advance tax on imports of refined petroleum products has been reduced from 7.5 percent to 2 percent and duties on crude petroleum imports have been lowered from 5 percent to 3 percent.
“Recently, the NBR demanded Tk 2,403 crore in arrears, of which we paid Tk 700 crore today,” said the BPC chairman.
He also expressed support for the invoice-based method, noting that the NBR has proposed a duty rate of 40 US cents per litre of crude oil imports.
Ahsan estimated that the policy shift will require BPC to pay an additional Tk 700 crore to Tk 800 crore in the short term.
Fuel Imports Continue Under G2G Deals
Currently, BPC spends between USD 450 million and USD 500 million each month on importing and refining petroleum products.
Last Wednesday, the government approved petroleum imports worth approximately Tk 10,006.63 crore under government-to-government (G2G) arrangements for the July–December 2025 period.
The fuel will be procured from six state-run companies: PTTT (Thailand), ENOC (UAE), PetroChina and UNIPEC (China), BSP (Indonesia), PTLCL (Malaysia), and IOCL (India).
In addition, the committee approved the import of 25,000 metric tonnes of Gasoline 95 Unleaded Octane from Indonesia’s PT Bumi Siak Pusako Zapin (BSP) at a cost of Tk 208.63 crore. The purchase will be made at a reference price of $73.61 per barrel, with a premium of $5.93 per barrel.