The government has asked the central bank to provide foreign currency worth US $ 300 million from its coffer to foot the fuel import bills for next couple of months.
This decision was taken Sunday during an emergency meeting at the finance division against the backdrop of recent crisis in opening letters of credit (LCs) by nationalised commercial banks (NCBs) due to foreign currency crunch.
"We are providing sufficient foreign currency to the NCBs to overcome their liquidity crisis for the purpose of footing fuel import bills," Finance Minister Saifur Rahman told newsmen after the meeting.
The meeting also instructed two NCBs -- Agrani and Janata -- to open letters of credit (LCs) without any delay to import around 0.6 million tonnes of petroleum products.
Energy Adviser Mahmudur Rahman, Bangladesh Bank (BB) Governor Saleh Uddin, finance secretary, National Board of Revenue (NBR) chairman and other high officials attended the meeting that cautioned against any purposeful delay in opening LCs.
Agrani and Janata banks have been directed not to delay in opening the LCs, Saifur added.
Saifur, however, refused to disclose how much foreign currency would be supplied to these banks for oil import in favour of Bangladesh Petroleum Corporation (BPC).
Meeting sources said the BB governor has been asked to provide $300 million for footing the import bill of 0.6 million tonnes of fuel oils that can cover up to two months of local consumption.
But the central bank may not provide the foreign currency in cash as that may contradict with the existing monetary policy prescribed by the International Monetary Fund (IMF) to qualify for its Poverty Reduction Growth Facility (PRGF) fund.
The BB is likely to provide the money in the form of overdraft, sources added.
In the meantime, Mahmudur Rahman, again reiterated the assurance given Saturday that the disruption in the northern region's supply chain will be overcome before the deadline of 72 hours.
"The supply chain will be restored before the 72-hour deadline, thanks to alternative measures taken at Baghabari," said Rahman, adding that the government has no plan to increase the petroleum price in the near future.
He also said they have discussed the annual import bills of fuel import and reviewed proposals of a number of international financial institutions to provide foreign currency in the form of loans.
According to energy division, the country will require 3.7 million tonnes of fuel for the 2006 calendar year. The import bills of such an amount would be around $ 2.0 billion.
Islamic Development Bank (IDB) will continue to provide $ 700 million for oil purchase as it has done for the last several years. The government is in talks with two international banks for an additional $ 500. It is also exploring other options to meet the rest of the fuel import bills.