Friday, June 23 2006 12:36 Hrs (IST) - World Time -

Dhaka: Bangladesh's flag carrier Bangladesh Biman has refused to pay its fuel bills worth $2 billion to the state-owned Bangladesh Petroleum Corporation (BPC).

Biman managing director M.A. Momen communicated the company's inability to pay during a meeting with Mahmudur Rahman, advisor to the energy ministry, on Wednesday.

"Sorry sir, we can't pay the BPC whether it continues to supply fuel or not," Momen told Rahman, UNB news agency said quoting a meeting source," he said.

The ball is now in Prime Minister Khaleda Zia's court.

The meeting decided that the energy ministry and Biman would jointly seek an appointment with the prime minister to resolve the issue.

Biman has been in the red for long because of alleged mismanagement and rising operational overheads, although it has cited rising international fuel prices as a principal reason.

It has shelved plans to purchase new aircraft, making do with the ageing fleet of 13, and has had to suspend operations to the US for both monetary reasons and for security lapses alleged by the US aviation authorities.