There has been no external audit of the accounts of Bangladesh Petroleum Corporation over the last 10 years, the Parliamentary Standing Committee on Public Undertakings has found.

Expressing shock at the widespread irregularities in the state-run BPC, the committee said that even the audit objections raised by the Comptroller and Auditor General of Bangladesh in fiscal 2012-13 have not been disposed of till now.

"There is little transparency and accountability in the BPC. We are shocked to see the extent of irregularities," ASM Feroz, chief of the parliamentary body, said after a meeting at the Jatiya Sangsad Bhaban.

In fiscal 2012-13, the CAG found irregularities of Tk 9,295.4 crore in the two previous fiscal years. The BPC replied to most of the objections, but the CAG said those were "not acceptable".

"On May 22 this year, the public accounts committee of parliament asked the BPC to provide it with all the proof supporting BPC's claims by the next two months. But the BPC is yet to provide those," Khan Md Ferdausur Rahman, deputy comptroller and auditor general at the CAG, said at yesterday's meeting.

According to the 2012-13 audit report, the BPC lost Tk 708 crore in interest for failing to collect dues of Tk 5,957 crore from three distributor companies --Padma, Meghna and Jamuna -- between 2010 and 2012.

"On one hand, the BPC supplied fuel to the three distributor companies  at subsidised prices. Instead of paying the BPC in due time, the distributors deposited the money with their bank accounts and got a large amount of money in interest and made profits. This allowed those distributors to pay their officials extra money as incentive bonus and provide money to Workers Profit Participation Fund," the audit report mentioned.

The BPC, however, claimed it had collected the dues from the distributors but could not furnish any proof to support its claims, the CAG said in the report.

"The BPC never initiated any reconciliation of accounts for eight years [till fiscal 2012-13] -- a major part of financial management. This is a violation of the rules as the BPC was supposed to carry it out within six months after the end of a fiscal year," it said.

In accounting, reconciliation is the process of ensuring that two sets of records are in agreement. It is used to ensure that the money leaving an account matches the actual money spent.

Between 2010 and 2012, the BPC had to pay $6 million as demurrage for using ships of foreign companies as "floating storages".

"Though the BPC had the capacity to unload five to six fuel-carrying ships, it had kept anchored eight to 10 ships at a time. The BPC described those as floating storages, which is unacceptable," the audit report said.

Referring to the National Energy Policy, 1996, the report said the country should have a fuel storage capacity for at least 60 days, but it now has a capacity for 30-35 days. "The BPC is paying thousands of dollars as demurrage every year by not expanding the storage capacity … This is unacceptable because there are enough space and experts to build storage tanks."

According to a report that the BPC submitted to the parliamentary body yesterday, the storage capacity was 9.90 lakh tonnes in fiscal 2012-13, which stood at 13.60 lakh tonnes in 2021-22.

The CAG report mentioned that the BPC paid Tk 9.15 crore as lighterage charge -- a refundable transport fees for loading and unloading a cargo -- to the exporters during the audit period, but it didn't issue any invoice for a refund of the amount.

Citing other irregularities by the BPC, the audit report said the BPC sold furnace oil to non-operational power plants, took loans from the government despite having huge deposits with banks, and kept with it the money it collected as VAT from businesses instead of giving it to the state exchequer.

Talking to The Daily Star last night, ASM Feroz said the BPC conducted only internal audit over the last 10 years whereas it was supposed to be done by the CAG. Besides, there had been irregularities in BPC's purchases.

About the non-disposal of the audit objections, he said, "It's a failure of the authorities concerned."

According to meeting sources, acting BPC chairman Khalid Ahmed told the parliamentary body that there was no scope for institutional mismanagement and irregularities in the BPC.

FUEL PRICES TO BE ADJUSTED

At yesterday's meeting, top officials of the power, energy and mineral resources ministry told the House watchdog that fuel prices would be adjusted as soon as possible in line with the global prices.

The parliamentary body asked the ministry to take measures to increase the BPC's storage capacity of refined and crude oil and keep adequate funds at hand for emergency purposes.