In Bangladesh, a dollar shortage is causing a fuel crisis, with the state petroleum company owing more than $300 million and facing an “alarming decrease in fuel reserves”. All fuel imports and marketing are controlled by Bangladesh Petroleum Corp (BPC), which has asked the government to permit domestic commercial banks to settle dues with India in rupees.
The South Asian nation’s dollar reserves have shrunk more than a third since February last year, leaving it with a seven-year low of $30.18 billion by May 17. This has caused power cuts and hurt its exports-oriented garments industry.
BPC imports 500,000 tonnes of refined oil and 100,000 tonnes of crude oil every month, but several fuel suppliers have either sent fewer cargoes than scheduled or threatened to halt supplies. Creditors include Unipec, Vitol, ENOC, Indian Oil Corp Ltd (IOC), PetroChina and Indonesia’s BSP.
BPC has asked the government to allow Bangladesh’s nationalised commercial banks to settle dues with Indian companies in rupees. In September, State Bank of India asked exporters to avoid settling deals with Bangladesh in dollars and other major currencies.
The International Monetary Fund approved loans of $4.7 billion for Bangladesh in January, but rising prices of energy and food because of the war have inflated its import bill and the current account deficit.