• Wednesday, Dec 01, 2021
  • Last Update : 12:08 am

Uniform LPG pricing in the offing

  • Published at 11:12 pm September 2nd, 2020
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Liquefied Petroleum Gas cylinders Mehedi Hasan/Dhaka Tribune

Regulatory body to hold mass hearing soon

In the face of growing criticism over a lack of monitoring of liquefied petroleum gas (LPG) prices, the government has finally paid attention to the whimsical pricing issue, aiming to resolve the problem. 

The Energy and Mineral Resources Division has already sent a letter to the Bangladesh Energy Regulatory Commission (BERC), the lone authority in the country which sets tariffs related to power and energy. 

But before fixing the prices, the regulatory body needs to hold a mass hearing involving the ministry or divisions concerned, and other stakeholders, including consumers and relevant power and energy companies, according to the BERC Act-2003.

A highly-placed BERC official told Dhaka Tribune that the commission had already planned a meeting with stakeholders, which could be followed by a mass hearing as the process to set LPG prices was underway.

“But before that we are going to submit a report in this regard to the Ministry of Power, Energy and Mineral Resources by September 30,” said Md Maqbul-E-Elahi Chowdhury, BERC member (gas).

“BERC cannot do it all [fix tariffs] on its own. In doing so, we have to go for a mass hearing and upon that, we suggest revised prices, which finally come into effect once cleared by the government,” he said.

The BERC member hinted that the mass hearing might be held by the end of this month. 

When contacted, Energy and Mineral Resources Division Senior Secretary Md Anisur Rahman said: “In mid-May, we wrote to BERC asking for LPG prices to be set like other fuel items as it is the commission’s responsibility.” 

“As far as I know, they (BERC) are working sincerely and are supposed to submit a report to us by either this month or early October, in which they will recommend the potential pricing formula,” he said.

Uneven competition

LPG prices fluctuate very often in the country, with the demand for the bottled fuel item skyrocketing every year.

Currently, private LPG companies are charging up to Tk1,000 for each 12-kg cylinder of LPG, mainly in remote areas. But the same amount of gas is priced at Tk800-950.

The state-run Bangladesh Petroleum Corporation (BPC) sells 12.5kg bottled LPG at just Tk600. 

Interestingly, private companies reduced the prices in mid-July by almost Tk100, but started charging an increased price after Eid-ul-Azha as demand for LPG grew sharply. 

However, the BPC did not revise the price. 

The country has a demand for nearly 713,000 tons of LPG this year, says the Energy and Mineral Resources Division.

But the BPC can only supply 20,000 tons, so the lion’s share of the LPG market will be controlled by private companies.

BPC says it is selling LPG in line with the global market, which means customers are being charged significantly less than before.

Regarding higher prices charged by private companies, BPC sources said those companies had set their prices “whimsically.”

The lack of a pricing policy and strict monitoring is to blame for the price discrepancies, they added.

What the officials say

M Shamsul Alam, energy adviser to the Consumers’ Association of Bangladesh, previously claimed the government was deliberately keeping the gas crisis alive in the country to help LPG companies cash in on the woes of the consumers.

Currently, only 18 out of 58 approved companies, including BPC, are manufacturing LPG across the country.

LPG consumption in the country has witnessed a whopping four-fold growth over the past three years, with households, commercial entities and vehicles increasingly relying on the fuel.

Meanwhile, some high-ups in the government seem to have little interest in resolving the price differences.

Earlier, the prime minister’s energy adviser, Taufiq-e-Elahi Chowdhury, had repeatedly told reporters that the government wanted the LPG market to be open to help keep prices at affordable levels.

On December 14, 2018, Abu Hena Md Rahmatul Muneem, former energy secretary, told the media that the authorities had no intention of fixing the prices of bottled LPG as it was BERC’s responsibility to take care of the matter.

In a recent development over the LPG issue, the High Court on August 25 directed BERC to take steps to prevent sellers from increasing prices.

Earlier on January 21, the High Court issued a rule asking the authorities why it should not order them to take immediate action to form a committee for setting the maximum retail price of LPG and displaying it on cylinders.

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