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Oil Imports at Risk as Payment Default Threatens Supply Chain

Industry: Energy & Power, Oil & Petroleum

Bangladesh’s petroleum agency, the State-run Bangladesh Petroleum Corporation (BPC), is facing challenges in clearing payment arrears to foreign oil suppliers due to a dollar crunch. BPC owes approximately $300 million to different refined oil suppliers as of May 16, 2023. The delayed payments have irked the exporters, who have threatened to suspend oil shipments unless the dues are settled promptly. This issue arises at a critical time when the country is struggling to meet energy demand from consumers and industries.

BPC has only managed to pay a portion of the outstanding arrears to some suppliers after the payment deadlines had passed. The falling foreign-exchange reserves and the devaluation of the Bangladeshi taka against the dollar have affected state energy firms, resulting in piling arrears. The BPC is now seeking solutions to arrange US dollars for timely payments and avoid potential disruptions in oil imports.

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