Heavy rain and weak supply blamed for LPG price hikes

Monsoon rains and a supply shortage have caused private dealerships to hike the price of Liquefied Petroleum Gas (LPG) by up to Tk150 per 12.5 kg cylinder in the last month alone. According to the state-owned Bangladesh Petroleum Corporation (BPC), the national demand for LPG is currently one million tonnes, but only half of this is being produced. The mismatch between supply and demand, along with the rainy season, have combined to create upward pressure on prices, those involved in the business said. “We are selling 12.5kg cylinders to dealers at Tk900. They sell the cylinders at different rates to consumers,” A general manager of private LPG Company told the Dhaka tribune, seeking anonymity. Although prices in Dhaka city range from Tk950 to Tk1,000 per cylinder of the cooking gas, several dealers said they had raised the price by Tk100 from this month outside of the capital. Some consumers have reported prices climbing to as high as Tk1,150 per cylinder. “We have to pay around Tk1,150 to buy a 12.5kg cylinder,” said Md Fazlul Haq, a consumer from Satkhira district. “When I went to refill a LP cylinder, they charged me Tk1,050 which was Tk950 before,” said another consumer from Chandpur district. The state-owned LP Gas Limited, a subsidiary of BPC, is supposed to sell cylinders at the government-fixed rate of Tk700. But consumers said they hardly ever see a cylinder of that company in the market. The BPC, a statutory organisation under the Ministry of Energy and Mineral Resources, is engaged in supervising, coordinating and controlling all the activities relating to import, storage, marketing and distribution of petroleum products in the country. Aside from its own initiatives, the government has made the process of establishing privately-owned LPG bottling plants easier to increase the supply of LPG. Ten local and foreign companies are now producing LPG in the country. The low-cost LPG supplied by the state-run producers, however, has failed to play any role to keep the market under control due manipulations by the dealers and distributors. “An initiative was taken to promote and popularise the use of LPG. The price has gone up and down (but) I think now that many companies are operating in the market, the price will regulate properly,” said Mohammed Saidul Islam, director and CEO of Laugfs Gas (Bangladesh) Ltd. Under the latest gas price hike which became effective from June 1, a domestic user must pay a monthly gas tariff of Tk900 for a single-burner stove and Tk950 for a double-burner stove.