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Fixing LPG price

Energy Div violates HC order, BERC Act

Published : 22 Sep 2021 10:14 PM | Updated : 23 Sep 2021 01:46 PM

The Energy and Mineral Resources division has been accused of violating the High Court order and the Bangladesh Energy Regulatory Commission (BERC) Act in fixing the price of LPG.

The Energy Division recently sent a letter to the BERC, where it said that the commission could fix the price of liquid petroleum gas (LPG) only for the private sector, but it would not be able to fix the price of government LPG. BPC, another state-owned company, would set the price of government LPG as before.

Protesting the Energy Division’s directive, experts say it is a clear violation of the law. If the directive is implemented, the power of the Energy Regulatory Commission will be curtailed.

According to the BERC Act, the commission has to fix the price of electricity and fuel in the country. But so far the commission has not fixed the price of any other product except for the price of electricity. The commission held a public hearing earlier this year to fix the price of LPG. Then on April 12, for the first time, the commission fixed the price of LPG.

On September 9, a letter signed by Shamima Ferdous, deputy secretary of the energy division, was sent to the BERC secretary. It is said that BERC is fixing the price of government LPG along with private LPG. As a result, the state-owned LP gas company limited is not able to create competition in the LPG market. 

BERC will not fix the price of LPG supplied by LP Gas Limited considering the overall welfare of the people. The directive of the energy division said that Bangladesh Petroleum Corporation (BPC) will fulfill the responsibility.

Energy expert professor M. Shamsul Alam told Bangladesh Post the energy division could not do it in any way. Because their instruction is in conflict with the law of BERC. They have committed punishable crimes. Violation of the BERC law, it can result in both fines and imprisonment for the officers.

‘The price of LPG of various companies in the country is different now. Consumers Association of Bangladesh (CAB) filed a writ in court considering consumers’ interest. After that, the commission took the responsibility of fixing the price by the order of the court. Earlier, BPC used to perform this duty. It would not benefit the people,’ he said. 

Shamsul Alam also said that ‘even though the commission started fixing the prices, they could not implement these prices in the market due to the traders. Because the traders did not accept this price. Again, the commission could not take the action that it was supposed to take if they did not comply with the price as per the law. ‘In this case we went to court again about the price effect. But the energy division is going to take such a decision before the court gives any direction in this regard.’

‘Consumers will get their benefits if the prices of all petroleum products, including LPG, are fixed through BERC, otherwise one-sided benefits will always be seen. It is against the public interest to set government prices and private prices separately for the same product,’ he added.

Asked about this, BERC Chairman Md. Abdul Jalil told Bangladesh Post that three cases were pending in the high court over the pricing of LPG. In one of the cases, the high court ordered BERC to set the price of LPG. There is no opportunity to differentiate the price between public and private LPG. The law is the same for everyone. 

‘We have fixed the price of this product as per the instructions given to us by the court for fixing the price of LPG. There was a public hearing on some objections,’ he continued. 

The chairman said ‘BERC secretary had received the letter from the energy division. But I haven't seen it yet. We will make a decision once the letter is documented. I do not want to comment on this.’

The Bangladesh Energy Regulatory Commission (BERC) has 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. After that, BERC is adjusting the 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. 

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. LPG is relatively new in Bangladesh, but the demand is increasing day by day.

About 20 private companies have been operating in the market with more than 95 percent market share by annually importing 1.2 million metric tons of bulk LPG from mainly the Middle-East while the state-owned LP Gas Company is locally producing 25,000 MTs of LPG from locally produced condensates at different gas fields.