Bangladesh struggles to pay for gasoline imports as greenback disaster worsens -letters By Reuters

© Reuters. FILE PHOTO: Folks refuel their bikes at a gasoline station after gasoline worth surge as much as fifty p.c in Dhaka, Bangladesh, August 6, 2022. REUTERS/Mohammad Ponir Hossain

By Ruma Paul

DHAKA (Reuters) – Bangladesh is struggling to pay for imported gasoline due to a greenback scarcity, letters reviewed by Reuters present, with the state petroleum firm owing greater than $300 million because it faces an “alarming lower in gasoline reserves”.

All import and advertising of gasoline within the nation of practically 170 million individuals is managed by Bangladesh Petroleum Corp (BPC), which has requested the federal government to allow home business banks to settle dues with India in rupees.

The South Asian nation’s greenback reserves have shrunk greater than a 3rd since Russia’s invasion of Ukraine in February final 12 months to face at a seven-year low of $30.18 billion by Might 17.

Closely reliant on vitality imports, Bangladesh is grappling with energy cuts ensuing from a gasoline scarcity which have badly harm its exports-oriented clothes business.

“On account of a scarcity of international foreign money/{dollars} within the home market and the central financial institution not assembly demand for U.S. {dollars}, business banks are unable to pay for imports on time,” BPC instructed the facility ministry in a Might 9 letter reviewed by Reuters.

That adopted a warning in a letter in April that stated, “If it’s not doable to import gasoline in response to the import schedule ready for Might, provide could also be disrupted all through the nation with an alarming lower in gasoline reserves.”

The ministry, BPC and the central financial institution didn’t instantly reply to phone calls to hunt remark.

BPC imports 500,000 tonnes of refined oil and 100,000 tonnes of each month.

The April letter stated a number of gasoline suppliers had both despatched fewer cargoes than scheduled or threatened to halt provides.

Collectors included Unipec, the buying and selling arm of China’s state-owned Sinopec (OTC:), Vitol, ENOC, Indian Oil Corp Ltd (IOC), PetroChina and Indonesia’s BSP, it stated.

“A number of firms are threatening to cease provides whereas others are sending fewer cargoes than deliberate,” stated a BPC supply who sought anonymity to talk on a delicate difficulty.

BPC should pay $41.1 million this 12 months for diesel to India’s Numaligarh Refinery Ltd, majority owned by Oil India Ltd, whereas IOC is owed $147.2 million for diesel and jet gasoline, the Might letter confirmed.

BPC requested the federal government to permit Bangladesh’s nationalised business banks to settle dues with Indian firms in rupees.

In September, Reuters reported that State Financial institution of India had requested exporters to keep away from settling offers with Bangladesh in {dollars} and different main currencies as its reserves fell, favouring as an alternative the taka and rupee currencies.

For years, Bangladesh’s $416-billion economic system has been one of many world’s quickest rising, however rising costs of vitality and meals due to the battle have inflated its import invoice and the present account deficit.

In January, the Worldwide Financial Fund accepted loans of $4.7 billion for Bangladesh. Others in South Asia, equivalent to Sri Lanka and Pakistan, have additionally sought or acquired IMF funds this 12 months.

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