DHAKA, 18 February 2006 — Bangladesh has stopped train service on eight loss-making routes, citing the need for fuel-consumption cuts as immediate reason.

The routes are Dhaka-Mymensingh, Dhaka-Bhairab, Mymensingh-Bahadurabad, Chittagong-Akhaura, Mymensingh-Jariganj, Sylhet-Chhatak Bazar, Laksam-Noakhali and Chandpur-Laksam.

Among the closed train services, two are passenger and the rest mail services, Bangladesh Railway officials here said about the step, seen as an austerity measure in the wake of a fuel crunch.

“Those services were continuously incurring loss to the railway coffers and the government took the decision to curtail the fuel consumption amid rising fuel prices,” one official said. The official said the Communications Ministry asked the Railway director general to scrap the loss-making services two months ago.

In protest against the government decision, railway workers and passengers of the affected trains staged daylong demonstrations at various stations yesterday.

Meanwhile, in a bid to ease the country’s fuel crisis, the Finance Ministry has approved a proposal of the Bangladesh Petroleum Corporation (BPC) to get a loan of $250 million from Standard Chartered Bank for urgent import of fuel oil to meet the demand for the next six months.

This is the first time BPC, the state-owned petroleum marketing agency, would resort to borrowing from a foreign commercial bank to import oil in view of its fund shortage and paucity of foreign exchange, official sources said.

Bangladesh needs 3.7 million tons of refined oil a year and BPC meets the demand by importing it mainly from Kuwait, Saudi Arabia and the United Arab Emirates. The country will need about $2 billion to import oil during the current fiscal year.

The BPC is also negotiating with another foreign bank, HSBC, for a $200 million credit. The interest rate of Standard Chartered would be a little higher than that of the Islamic Development Bank (IDB) from which the government normally takes credit for importing petroleum.

The SCB will charge 6.81 percent interest on the loan while the interest rate of IDB is 6.56 percent. The BPC projection for this fiscal year puts the country’s demand for diesel at 2.3 million tons, kerosene 5,20,000 tons, jet fuel 2,60,000 tons and gasoline at 2,95,000 tons.