Dhaka, Apr 12: Bangladesh is seeking a $500 million-loan from the Islamic Development Bank (IDB) for oil imports as the country faces a foreign currency squeeze in the face of surging oil prices, a senior official said on Wednesday.
This will be on top of the $700 million the country normally receives each year from the IDB.
''Our economic relations division secretary had gone to the IDB headquarters in Jeddah to negotiate the new loan proposal,'' the government's energy adviser Mahmudur Rahman told Reuters.
He said the government had sought $1.2 billion for state-run Bangladesh Petroleum Corporation (BPC), the sole importer and distributor of oil in public sector, to pay for costly oil imports as local banks are short of foreign currencies.
''So we have turned to the IDB for the additional credit to foot increased bills in the wake of higher oil prices in the international market,'' said the adviser, who did not say if the IDB had accepted Dhaka's request yet.
Global crude oil prices have jumped by 13 percent since the start of the year, driven by fears over supplies from OPEC producers Iran, Nigeria and Iraq. U.S. crude rose to as high as $69.05 a barrel on Wednesday, bringing prices within striking distance of the all-time high of $70.85 hit last August.
In January, the energy ministry had asked for $1 billion in loans from Bangladesh Bank, the central bank, but the request could not be met due to a foreign currency crunch, ministry and bank officials said.
Bangladesh's fuel import costs in fiscal year 2004-05 (July-June) grew 23 percent to $1.56 billion from $1.27 billion a year earlier.
They said the fuel import bill this year could rise to $2 billion because of spiralling international fuel prices.
Its foreign exchange reserves fell to $2.91 billion at the end of March from $3.03 billion a month earlier, after a payment of $322.64 million to the Asian Clearing Union last month for imports pulled the reserves down from the highest level of the 2005/06 fiscal year, central bank officials had said.
The country's total annual demand for fuel is 3.7 million tonnes, of which it imports nearly 2.8 million tonnes from Kuwait and the rest from Saudi Arabia, the United Arab Emirates and India.