Foreign airlines now can pay jet fuel payment in dollars
From now, foreign airlines will be able to pay for fuel in dollars, the Bangladesh Bank said on Monday.
The decision was taken to ensure exchange rate benefits for the state-owned fuel company.
In this regard, the central bank issued a circular allowing Authorised Dealer (AD) banks to issue drafts for purchase of fuel in dollars favouring the state-owned fuel selling company.
According to the circular, AD banks would issue the foreign currency draft on behalf of foreign airlines operating in Bangladesh. For this, the equivalent of taka could be shown in the disbursement statement required for reporting purposes, the circular said.
The current price for jet fuel for international flights is $0.73 per litre and for domestic flights it is Tk77 per litre.
Earlier, foreign airlines could only use the local currency to purchase fuel from the state-owned fuel company.
The circular also allows for the foreign currency payments to be retained in foreign currency accounts held by the state-owned fuel company, with permission from the Bangladesh Bank.
The amount retained in foreign currency would be used either for settlement of import payments or encashment in Taka.
A Bangladesh Bank official said the state-owned fuel company will get the foreign currency directly, and it can use it to meet import settlement. The company will not face any loss in the exchange rate.
One the other hand, foreign airlines will also be benefited by this process, he added.
Saudi Airlines, Emirates, SpiceJet, Fly Dubai, Air Arabia, Singapore Airlines, Indigo, Malaysia Air, Kuwait Airways, Qatar Airways, among others, operate in the country.
Last week, the Bangladesh government increased the prices of diesel and kerosene by Tk15 per litre due to the continuing rally of fuel prices in the global market.
A sharp rise in the price of fuel has been threatening the airline industry's slow recovery from the coronavirus crisis.
Oil prices climbed to their highest levels in seven years last month, raising concerns over carriers' costs as low passenger demand persisted after months of travel restrictions.
The price of jet fuel doubled to almost $750 per metric tonne over the past year, according to data from the International Air Transport Association and Platts.
