Private liquefied petroleum gas (LPG) operators have proposed 56 per cent more price than the state-owned companies. However, no company has given details of why the price will be increased.
After getting proposal from all LPG operators, Bangladesh Energy Regulatory Commission has formed an evaluation committee with seven-member headed by Director (Electricity) CFK Musaddeq Ahmed to evaluate the proposal. The committee had a meeting recently, BERC official said.
This technical committee has proposed to BERC to hire a petroleum expert for price adjustment of LPG. In addition, several operators have been asked for detailed information on pricing proposals.
However, currently the consumers are now purchasing LPG at high price relatively others countries. If the proposal is consider by BERC then the consumers will have to pay more price.
According to BERC, they received three separate proposals. One is from state-owned LP Gas Limited, the second from the LPG Operators Association of Bangladesh (LOAB) and the last one from Promita LPG.
The LP Gas Limited, a subsidiary of the BPC, submitted a separate proposal, seeking to increase the price of 12.5 kg cylinder to Tk700 from the existing Tk600. And the LOAB has proposed to increase the price of 12 kg cylinder to Tk 1,259 at the consumer level, which is 56 percent more than the LP gas of the government company.
The LP Gas Company has said in its proposal that the price should be increased by taka 100 in the international market. But there is no detail as to why this one hundred taka will be increased. In their proposal, LOAB gave details of where the VAT was being paid and where it might cost. But the two components that are the mainstay of LP gas, propane and butane, did not give a separate description of its mixture.
There are now 27 LPG companies licensed by BERC in the country. Of these, 19 companies are marketing LPG. There are about 3 thousand dealers. And the retailers are about 38 thousands. A total of 15 companies are importing LPG. The annual import is about 10 lakh tonnes. Domestic production is about 17 thousand tonnes per year.
However, Saudi Arabia is currently one of the largest exporters of LPG in Asia. The Saudi contract price-CP set by the state-owned Saudi Aramco is generally followed in the Asia region. Saudi Aramco announces the prices of propane and butane for the next month at the end of each month.
It is recommended to fix the price of LPG in Bangladesh in line with the market price of Saudi Arabia. It has been said to fix this price every month.
Bangladeshi importers import LPG through various traders based in the Middle East, Singapore, Indonesia and India.
Like other petroleum products, the market price of LPG is variable. Therefore, BERC has been asked to fix the price of LPG at the consumer level in line with the Saudi contract price.
In the international market, the price of this petroleum product has come down. For this, Bangladesh Petroleum Corporation (BPC) has reduced the price of its own produced LPG per cylinder weighing 12 liters from Tk 700 to Tk 600 at the consumer level in the country. But the price of the same weight of gas supplied by private companies may be as high as taka 1050 to 1150. There are also price differences between companies and locations. In Kolkata, the price of a 14.2 kg unsubsidised cylinder is taka 704 (Rs 621) and the subsidized cylinder is even lower.
BERC has taken an initiative to fix the price of LPG for the first time to avoid the contempt of court rule. To this end, the commission will hold public hearing on January 14, 16 and 17 on fixing LPG price, official said.
Earlier, on August 25, the High Court had directed BERC to fix the price of LPG through a public hearing and submit a report within 30 days after hearing a writ petition filed by the Consumers Association of Bangladesh CAB. Although a long time has passed since the order was issued, the Commission has not taken any initiative to comply with the order. They did not even summit any report to the court. On November 29, the high court issued a contempt of court rule against BERC chairman Mohammad Abdul Jalil.
