Six foreign fuel suppliers are piling pressure on Bangladesh Petroleum Corporation (BPC) to clear outstanding dues amounting to nearly half a billion US dollars, but a forex crunch in local banks is proving to be a major barrier to timely payments.

As of August 14, the BPC owed the suppliers around $533 million. But the bills keep piling up with each passing day. The six suppliers were owed $504 million as of August 1, meaning the dues increased by $29 million in just 13 days.

However, some payments were made by the time this report was filed, bringing the outstanding dues down to $483 million as of August 24.

Officials concerned said some companies had not received payments for over three months.

Against this backdrop, a virtual meeting was held between the BPC officials and different companies on August 14 to discuss how to mitigate the pressure.

Contacted, Md Abdul Matin, director (finance) at the BPC, told The Daily Star, "We have enough funds. But we are unable to make payments on time due to the dollar crisis."

Central bank data showed that Bangladesh's taka lost 25.69 percent in value, hitting Tk 118 per dollar on August 19 compared to Tk 93.88 per dollar in July 2022, reflecting the depth of the greenback crisis.

It weakened further last week to around Tk 120 per US dollar after the central bank allowed more flexibility in the purchase and sale of foreign currencies.

Matin further claimed there had been no disruption to the supply of fuel due to the delays in payment.

Vitol Asia Private Limited, a supplier based in Singapore, is the BPC's biggest creditor. The company is owed $236.28 million against 11 invoices.

The other creditors are Malaysia's Petco Trading Labuan Company Limited (PTLCL), which is owed about $22 million, Emirates National Oil Company (ENOC) of the UAE (around $57 million), Indonesia's PT Bumi Siak Pusako (around $47 million), Indian Oil Corporation Limited (about $34 million), and Unipec Singapore Private Limited ($64 million).

These foreign supplierssent 30 shipments of fuel to Bangladesh from April to July.

In the first week of this month, Vitol and ENOC suspended cargo clearance until outstanding payments could be collected. However, after the BPC officials spoke to local agents of these two companies, the suspension was lifted.

According to the bank documents, a letter of credit (LC) worth $24.67 million was opened with Sonali Bank on April 1 to import octane from Vitol.

The BPC had committed to pay this LC in two instalments by April 28. But it managed to pay only $11.01 million in six instalments in June and July.

Similarly, two LCs worth $26.48 million and $21.42 million were opened with Sonali Bank on May 28 to import diesel and octane from PT Bumi Siak Pusako.

Although the LCs were due to be paid within a month, the BPC managed to pay just over $1 million.

On May 28, Sonali Bank opened another LC of $27.95 million for diesel imports from the ENOC.

Officials of the company's local office told The Daily Star on condition of anonymity that BPC authorities had not yet made the payment.

"We have contacted the top officials of the BPC several times in this regard," the official added.

The BPC officials added that suppliers had not yet confirmed the import schedule for September due to the accumulated arrears.

If it is disrupted, transport, trade, production and other sectors may be affected, they said.

According to officials concerned, payments to oil suppliers began piling up in 2022. They said the dues did not amount to large sums before that.

Small payments are still being made, but that is not enough, they said, so the arrears are gradually increasing.