Negative cash flow, lower dividend raise concerns; allegations of fuel adulteration and syndicate operations warrant scrutiny
While two major state-owned petroleum distributors, Meghna Petroleum and Padma Oil Company, recorded higher profits in the financial year 2025-26 (FY26), Jamuna Oil Company witnessed a significant decline in earnings, raising questions about its financial and operational performance.
Jamuna Oil’s net profit fell 34 per cent year-on-year to Tk 425 crore in the year ended June 30, 2026, according to its recently published price-sensitive information (PSI).
The decline was also reflected in the company’s earnings per share (EPS), which dropped to Tk 38.52 in FY26 from Tk 58.70 in the previous financial year.
More concerning was the company’s operating cash flow position. Its net operating cash flow per share (NOCFPS) plunged to negative Tk 278.80, compared with Tk 64.37 a year earlier, indicating that the company used substantially more cash in its regular business operations than it generated during the period.
Jamuna Oil acknowledged facing a cash shortage, citing higher cash outflows than inflows.
The company’s board recommended a 120 per cent cash dividend for FY26, down from 180 per cent in the previous year, reflecting a reduction in shareholder returns alongside the decline in earnings.
The financial performance of its competitors, however, presented a contrasting picture.
Meghna Petroleum recorded a 3 per cent year-on-year increase in profit, with its EPS rising to Tk 63.32 in FY26 from Tk 61.39 in FY25. Its NOCFPS also improved significantly to Tk 164.04 from Tk 109.47.
The company’s board recommended a 210 per cent cash dividend, equivalent to Tk 21 for each Tk 10 share, compared with 200 per cent in the previous financial year.
Padma Oil Company also reported stronger financial results, with its profit increasing 21 per cent year-on-year. Its EPS rose to Tk 69.47 from Tk 57.30, while NOCFPS improved to Tk 63.72 from negative Tk 39.83.
The company recommended a 170 per cent cash dividend, or Tk 17 for each Tk 10 share, up from 160 per cent in the previous year.
The contrasting results of the three state-owned distributors have brought Jamuna Oil’s financial performance under renewed scrutiny, particularly in view of allegations of irregularities in fuel handling, adulteration, smuggling and other questionable practices involving some officials and associated business operators.
Fuel adulteration allegations and questions over oversight:
Among the officials facing allegations is Abul Fazal Md Sadekin, currently serving as a deputy manager at Jamuna Oil’s Daulatpur depot in Khulna.
Several media reports have raised allegations against Sadekin, claiming that he has been involved in fuel adulteration, particularly the mixing of inferior substances with octane, allegedly in collaboration with a network of unscrupulous filling station owners in the Khulna region.
The allegations, if substantiated, could raise serious concerns about fuel quality control, depot-level supervision and the effectiveness of the company’s internal monitoring mechanisms.
Industry insiders have also pointed to weaknesses in laboratory facilities and monitoring at petroleum depots. They allege that inadequate testing facilities, coupled with insufficient surveillance by the Bangladesh Standards and Testing Institution (BSTI), create opportunities for fuel adulteration and other irregularities to go undetected.
Questions have also been raised over whether the existing monitoring system is sufficiently equipped to identify discrepancies in fuel storage, distribution and quality control.
Despite the publication of several media reports raising concerns about alleged irregularities, questions remain over the extent to which the relevant authorities have investigated the allegations and taken corrective measures.
The company’s declining earnings and sharply negative operating cash flow nevertheless warrant closer scrutiny by its board, the relevant government authorities and regulatory bodies.
The authorities need to examine whether weaknesses in management, financial controls, fuel quality assurance or depot-level supervision have contributed to the company’s operational challenges.
Experts believe that the management of Jamuna Oil—including the officials named in the allegations—should respond to the claims brought against them and explain the reasons behind the deterioration of the company’s financial indicators.