DHAKA: State-run Bangladesh Petroleum Corporation (BPC) will receive a $2 billion loan from the Jeddah-based Islamic Development Bank (IDB) to buy oil on the international market, a senior BPC official said on Monday.

“The IDB has agreed to lend the money for importing oil in 2012,” said Mohammad Abubakar Siddique, chairman of the BPC, the country’s sole oil importer and distributor.

He said the BPC would receive $300 million shortly as the first instalment.

The corporation would have to import over 6.7 million ton of fuel oil this year, sharply up from 2011 when it bought 4.8 million ton, against 3.8 million ton in 2010.

This was due to Bangladesh’s decision to build 49 mostly fuel-run power plants to generate an additional 5,319 megawatts of electricity by the end of 2013.

The IDB loans Bangladesh $1 billion annually, but last year BPC urged a doubling of the funds as imports rose substantially, the official said.

The IDB has reduced the ‘mark-up’ rate to 5.0 per cent from 5.3 per cent. The BPC buys oil at high prices from the international market and sells at a lower price in the domestic market, incurring losses.

Bangladesh on Friday raised fuel prices for a fourth time since May, to trim BPC’s losses.

“Still we have to incur $1.4 billion in losses in the year,” Mr Siddique said, adding that the Bangladeshi taka’s extended decline against the dollar has added to the country’s difficulties.—Reuters