The government has begun discussing whether to allow the import of condensate – a gas by-product – instead of lifting its restriction on supplying the raw material to private refiners from the country's gas fields.
Although the issue is still at an early stage, the share price of CVO Petro Chemical Refinery Ltd, which got listed on the capital market in 1990, is rising.
The company's share price has risen 43% in the last month due to rumors on social media.
The company has incurred huge losses as production has stopped. It had no revenue in the January-March quarter.
The power, energy and mineral resources ministry suspended the supply of condensate to all private condensate fractionation plants for three months from July 2020 until further notice.
The temporary suspension of supply of condensate was for 12 private condensate fractionation plants including CVO Petro Chemical Refinery.
The company has stopped production for more than a year due to the raw material crisis following the suspension of condensate supply.
"There is no chance of supplying condensate from the country's gas fields now. But the ministry is working on whether to allow import from abroad," Murshed Hossain Azad, deputy general manager (Marketing and Distribution) of Bangladesh Petroleum Corporation, told The Business Standard.
"The matter is under discussion. Permission may or may not be granted. No decision has been made yet. Information on condensate has been sought from the ministry, we have submitted them."
The CVO Petro Chemical Refinery received a letter from the Energy and Mineral Resources Division on 27 June regarding the suspension of condensate supply from 1 July.
As condensate is the company's only raw material, its authorities announced a three-month shutdown from 7 July.
But even after the stipulated three months, there is no progress on the resumption of production as there is no solution to the issue of raw materials.
Khwaza Mowin Uddin Hossain, company secretary of CVO Petro Chemical Refinery, told TBS, "We have appealed to the ministry about the supply of raw materials but yet to get their final decision. I have learned that the matter is being discussed in the ministry."
Huge losses in nine months
CVO Petro Chemical Refinery has suffered huge losses due to the shutdown of production. Despite the losses, the share price is upward.
In the last one month, its share price rose to Tk135.3 each, from Tk94.5 on 6 July.
Earlier, on June 3, the company's share price fell from Tk115 to Tk83.7. Since then, the share price has been rising again.
The company has incurred a loss of Tk4.83 crore in the first nine months of fiscal 2020-21. Its revenue fell 93% year-on-year due to the shutdown.
The company had a net income of Tk3.43 crore in the July-March period. At one point in the previous year, the revenue was Tk52.92 crore and the loss stood at Tk1.07 crore.
The loss per share increased to Tk1.97, from Tk0.37 in the same period of the previous year.
In the January-March quarter, the company had no income. It had incurred a loss of Tk1.73 crore due to operating expenses.
At the same period of the previous year, the company had revenue of Tk19.05 crore, with a profit of Tk9.62 lakh.
In fiscal 2019-2020, the company's revenue was Tk68.52 crore, which was Tk72.96 crore in the previous year.
But the company had a net loss of Tk1.27 crore, up from Tk31.41 lakh in the previous year. The company could not pay any dividends to its shareholders due to losses.
The loss per share stood at Tk0.51 while, in the previous year, the earnings per share were Tk0.12.
In 2014, CVO Petro Chemical Refinery shifted its business from producing edible oil to refining condensate.
The company engaged in the production and sale of fuel like motor spirit, high-speed diesel, and mineral turpentine from natural gas condensate.
Its installed production capacity is 150 tonnes per day.
The company procured raw material – natural gas condensate – from various gas fields including Sylhet Gas Fields Limited.
Also, its finished products are sold to Padma Oil Company Limited, Meghna Petroleum Limited and Jamuna Oil Company Limited under Bangladesh Petroleum Corporation (BPC) as per contract.