Cooking gas prices rise, supply expected to increase

For more than two weeks, the country has been facing a shortage of liquefied petroleum gas (LPG) supplies. As a result, consumers have had to pay Tk 400–500 more than the official price for the most widely used 12kg LPG cylinder.

Amid the shortage, prices were officially raised yesterday, Sunday. Supplies to the market may now gradually increase.

The Bangladesh Energy Regulatory Commission (BERC) announced the new prices on Sunday. The price of a 12kg cylinder has been increased by Tk 252 to Tk 1,837. Last month, BERC had set the price of a 12kg cylinder at Tk 1,585. In the market, however, it was being sold for Tk 2,200–2,300.

People involved in the LPG sector say nearly 10 million consumers use LPG as fuel. Of them, 80 per cent use it for cooking, while the rest use it in industry and transport. The private sector imports 99 per cent of the country’s LPG.

LPG imports have not declined significantly over the past two months, yet supplies to the market have fallen. Ensuring adequate supply is the government’s responsibility, which it has failed to do. Had the market been monitored earlier in the way it has been over the past few days, the crisis might not have occurred.

The LPG Operators Association of Bangladesh (LOAB), an organisation of businesses involved in LPG imports and supply, says 158,000 metric tonnes of LPG were imported in August. Another 156,000 tonnes were imported in September. This means imports have remained normal.

Three businessmen involved in LPG imports and supply said there was no reason for supplies to decline despite adequate imports. It is not impossible for the government to obtain data on LPG imports and market supplies. Such data would reveal who has been stockpiling the product.

BERC sent letters to 12 LPG-importing companies on Saturday, asking them to provide daily data on LPG imports and supplies for the entire month. Several companies submitted the information yesterday, which BERC is now examining and verifying.

According to the LPG Traders Cooperative Society, companies began reducing supplies from 20 September. Initially, supplies were cut by 30 per cent, and the reduction was gradually increased to more than 50 per cent.

For the past week, trucks operated by dealers have been queuing at the depots of various companies. This has pushed up truck rental costs, making it impossible to sell LPG at the official price. Companies began increasing supplies after BERC raised the price.

The supply shortage might not have occurred had the price been increased in the middle of the month. It may now take several more days for supplies to return to normal.

LOAB President Amirul Haque told Prothom Alo that imports had not declined. LOAB had therefore already instructed its members to ensure that no one sold LPG at inflated prices. He also expressed hope that supplies to the market would now increase.

Two importers said shipping costs had risen because of the crisis in the Middle East. As BERC has taken this into account, imports next month should not be disrupted. Those who had been concerned about imports will therefore be able to increase supplies. Some traders had already stockpiled LPG, they said, resulting in the shortage.

The price of a 12kg LPG cylinder was Tk 1,253 in January. It rose by Tk 103 in February but remained unchanged in March. After the war began, the price was increased by Tk 599 in two instalments in April.

It was then reduced by Tk 55 in June and Tk 357 in July. The price rose again by Tk 70 in August and was reduced by Tk 13 in September. The latest increase marks a major jump. In April, traders had also raised prices citing fears of a supply shortage. Before that, a major LPG supply crisis had emerged in December–January.

BERC Chairman Jalal Ahmed told Prothom Alo that the commission was investigating whether anyone had stockpiled LPG. It was collecting daily supply data from companies, which would be verified through field inspections.

He said a proposal to raise prices in the middle of the month was not reasonable and had only been done in April because of an emergency. He expressed hope that supplies would return to normal.

The new LPG prices came into effect at 6:00 pm Sunday. LPG cylinders of various sizes are available on the market. From now on, the price of LPG will be Tk 153.06 per kilogram. Prices for cylinders of different sizes will be determined accordingly. The price of LPG used in vehicles, or auto gas, has been set at Tk 84.62 per kilogram.

BERC has been setting LPG prices since April 2021. However, there have been complaints that LPG is not sold at the official price in the market. Prices often rise sharply in the name of supply shortages, while consumers sometimes cannot obtain LPG even after paying the higher price.

M Shamsul Alam, energy adviser to the Consumers Association of Bangladesh (CAB), told Prothom Alo that imports could not suddenly increase overnight. Adequate quantities had already been imported, so supplies should now increase.

This means an artificial shortage was created in the market to push up LPG prices, he said. He called for an investigation to identify those who had stockpiled LPG and for the licences of companies found responsible to be cancelled.