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Monday, 01 December, 2008, 23:40 GMT | more >>

Bangladesh's oil debts deepen



By Upstream staff 

Bangladesh has allowed its state oil firm to borrow up to $300 million from Standard Chartered Bank to pay off rising oil import bills, as it is likely to face $1 billion losses by the end of the year.

The government gave the green light to the Bangladesh Petroleum Corporation to take the loan at an interest of London Interbank Offered Rates (Libor) plus 1.79% a senior energy official told Reuters.

The government did not accept a loan offer by the French international bank BNP Paribas at an interest rate of Libor plus 1.83%.

BPC, Bangladesh's sole importer and distributor of fuel oil, has been a losing concern for years. The BPC and the government say the losses occurred mainly because the country sells fuels at lower rates than imported prices, which needs to be covered with subsidies.

Bangladesh last raised fuel prices by 22% in April 2007, lower than global rates, to give relief to local consumers, defying repeated advice by the donors including the World Bank and International Monetary Fund.


Monday, 31 March, 2008, 15:29 GMT  | last updated: Monday, 31 March, 2008, 15:32 GMT

Piling up: oil losses for Bangladesh are expected to reach $1 billion by year end
 

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