A liquefied petroleum gas bottling plant with the capacity of 100,000 million tonnes and a cylinder manufacturing unit will be set up in the country under public-private partnership initiative to meet the growing demand for this particular fuel.
An official of the Energy Ministry said the demand for LPG increased by 60% in last couple of years as the government suspended fresh gas connections to households since July 2010. However, the government started giving new gas connections for business purposes last year.
The new LPG plant to be installed on 10 acres of land at Kumira in Chittagong will have import facilities and storage tanks. The government has already allocated Tk22.08 crore to acquire land there. Another plant will be set up at Elenga in Tangail to manufacture LPG cylinders and necessary accessories, the official said.
The bottling plant and cylinder manufacturing unit would help ease the country’s energy crisis. A proposal made by the Energy Ministry to set up the bottling plant would be placed at a meeting of the cabinet committee on public purchase in the first week of next month.
Energy Secretary Md Abu Bakkar Siddique said Chinese and Indian firms have showed interest in investing in the project under the PPP initiative. “We hope the project will be launched next year.”
Businessmen said the demand for LPG in the country is nearly 1 million tonnes a year. The existing capacity of the government and private sector manufacturers and importers is only 100,000 tonnes.
Currently, an importer has to pay 5% customs duty, 15% VAT, 5% advance income tax and 4% advance VAT.
The state-owned LPG producing companies now supply 20,000 tonnes of LPG or 20% of the total market demand while private players supply the remaining 80% by importing LPG from abroad. Total demand for LPG is 500,000 tonnes per year while private sector is importing 100,000 tonnes of LPG from Singapore, Malaysia, Saudi Arabia, Abu Dubai and Kuwait.
The Bangladesh Petroleum Corporation is marketing LPG as the lone company in the country since independence. With growing demand, the government in mid-90s allowed private sector to import and sell LPG in the local market.
According to the proposal, the government is supposed to allocate Tk284.41 crore to implement the project. Of the total, Tk181.60 crore will come as foreign currency while the working capital is estimated at Tk78.10 crore.
As Chittagong port has no land of its own for setting up the proposed LPG plant along with construction of CMB bulk LPG receiving jetty, the Energy Ministry will have to purchase land from private sector as per the project proposal.
