National, Front Page

Anomaly galore in LPG mkt

Published : 02 Jan 2022 10:39 PM | Updated : 03 Jan 2022 03:06 PM

The Energy Regulatory Commission (BERC), sets Liquefied Petroleum Gas (LPG) prices at the consumer level every month, but household LPG consumers are forced to pay extra.

BERC announced the latest price on December, 2 last year. A 12 kg cylinder of LPG is priced at Tk 1228. However, retailers are selling the same amount of LPG between Tk 1,250 to Tk 1320 in different places including Dhaka. 

LPG is available at fair prices in only one or two places.

LPG Retailers say it is not possible to sell at the price set by the government by adding transportation and other costs to the price at which it is bought from dealers. Prices should be reduced at the wholesale level. Otherwise, it is not possible to sell LPG at fixed price. There have been allegations of high prices as well as underweight.

The LPG Operators Association of Bangladesh (LOAB) is working to prevent the government's initiative to prevent the LPG market anarchy. As a result, the consumers have to buy LPG cylinders at higher prices.

Talking to retailers in Banani, Motijheel, Jatrabari and Mirpur areas of Dhaka in the last few days, it is learned that 12 kg cylinders are being sold at Tk 1230 to 1280 depending on the area. It has been reported that LPG cylinders are being sold at a price of Tk 1,320 outside Dhaka.

Mokhlesur Rahman, a resident of Daganbhuiyan in Feni district, said he bought a 12-kg LPG cylinder on December 20 for Tk 1,250.

On the other hand, Ahmedul Kabir, a resident of Panchagar district, said he bought a 12-kg LPG cylinder for Tk 1,320 last month. 

Al-Amin, a LP gas cylinder seller of Nesaria Corporation Limited in Banani area, said they were selling 12 kg LPG cylinders at Tk 1,250.

Bangladesh Energy Regulatory Commission (BERC) had set new retail prices for the first time by lowering the retail price of LPG on April 12 after a public hearing with all parties. Following that meeting, BERC is constantly adjusting LPG price every month based on the Saudi Contract Price (CP) of Propane and Butane. Propane and Butane are the two components of LPG, which Bangladesh imports from the international market.

LPG operators were selling LP gas on their own, on the pretext of losses. Later, a new public hearing was held in September due to the demands of the LPG operators. Then in October the commission announced the new price of LPG, which is higher than the prevailing market price. 

The traders are happy but the buyers are suffering. Last December, BERC reduced the price of LPG from taka 102.32 per kg for the month of December. As a result, the maximum retail price of the most common 12 kg cylinder in the market has been reduced from Tk 1,313 to Tk 1,228. The price is effective from December, 3.

BERC Chairman Abdul Jalil told Bangladesh Post, "We would take legal action if we receive any complaint on retailers selling LPG cylinders at higher prices. 

On the other hand, we have also written to the operators to inform us at what price they are selling LPG to their dealers. Besides, operation has already been conducted through mobile courts to check and prevent price hike. We continue our efforts to ensure that LPG is sold at fair prices in the market, Jalil added. 

A high official of BERC said that the commission has requested the Ministry of Commerce and the Ministry of Power, Energy and Mineral Resources to take steps for the local administration to implement the fixed price. 

Directorate of National Consumers Right Protection has also started taking action on the basis of the complaint. 

Energy expert, Professor M Shamsul Alam said, the role of BERC is on paper. They have failed to control the market. The commission needs to be stronger with the consumers to stop the unscrupulous traders.

There are state-owned companies in any sector to control the market. They will meet most of the market demand. However, in our country the scenario is reversed. As a result, the capacity and marketing system of government LPG companies are not being modernized, he said. 

The government is discouraging natural gas connections or supply in pipelines in the sector due to the gas crisis. LPG is recommended as an alternative to ensuring fuel safety. The LPG demand is increasing day by day.

State-owned LP Gas Company Limited has prepared a projection report on the demand for LPG in the country. According to the report, the use of LPG has increased by an average of 35.5 per cent every year for the last 10 years. If this trend continues, the demand for LPG in the country will increase to 7 million tons by 2041.

A total of 56 companies in the country have obtained licenses for LPG business. Of these, 28 private companies have been operating in the market with 98 percent market share. The market share of State-owned LP Gas Company Limited is only two percent. 

 According to BPC, some 70 per cent households in the country currently use plants (wood), dried dung and biomass for cooking. The rest use natural gas and LPG. Currently there are 38 lakh LPG users in the country.

Related Topics