Finance Minister AMA Muhith has made a quick u-turn and decided to carry out an international audit of Bangladesh Petroleum Corporation as per IMF condition to take the remaining part of Extended Credit Facility fund.
Just five days ago Muhith said the government would not rather take last $280m under the $1bn ECF than meeting a condition of international audit to the country’s loan fuel oil importer.
At that time he argued that hiring an international firm to audit BPC would violate the state law.
But he has now understood that the law never restricted the authorities to local firm only to audit the BPC.
“The law is not against hiring an international firm to audit BPC. So the audit can be carried out by an international firm in line with the IMF condition,” finance minister told Dhaka Tribune yesterday.
On July 14 he stated: “The government will not accept a harsh condition of appointing an international auditor for BPC as it is against the law. Besides, I think our firms are capable enough to conduct the audit.”
After overturning this decision, Muhith now hoped that the global lender would extend its ECF time till October as it would expire at the end of July.
Alleging the BPC authorities finance minister said there had been no standard of accounting system in the BPC in last 44 years since its inception.
“They (BPC) have not maintained any type of a standard balance sheet in last 44 years since independence of Bangladesh though its annual transaction amounts to Tk36,000-38,000 crore to import fuel oil from international market,” Muhith said.
“BPC officials, in fact, were not interested in maintaining international standard in auditing and keeping balance sheet. They kept the doors open for corruption,” he alleged.
According to the BPC website, it spent Tk36,587 crore in fiscal year 2013-14 to import crude, refined and lube base oil.
Muhith said the BPC needed massive reforms to its financial transaction and determination of fuel price in local market.
He said the BPC had fixed fuel oil price at $60 per barrel in last 20 years but it should be changed every year.
Fuel prices were $80, $90 and $120 per barrel in various times in the global market, but the BPC had kept the prices unchanged in local market over the years, Muhith said.
He criticised former BPC chairman saying he had no idea of international standard auditing and accounting for an organisation like it.
“When I asked about that, former chairman said he had conducted a feasibility study to this matter. However, he is now free from corruption charges brought by the Anti-Corruption Commission,” finance minister said.
The IMF delayed the sixth of the seven-part tranches for the $1bn loan in November last year after the government failed to meet two of its relevant conditions -- related to the VAT law and audit of BPC.
On April 12, 2012, the IMF board decided three-year arrangement loan to Bangladesh under its ECF programme to help the country overcome its macroeconomic pressures. The ECF carries zero per cent rate of interest and the loan is to be repaid within 10 years.
