Consumers forced to pay Tk 300–440 extra for cooking gas

Consumers are still unable to buy liquefied petroleum gas (LPG) at government-fixed prices, despite increases in the commissions for importers, distributors and retailers when the prices were last adjusted.

In Dhaka, consumers are having to pay at least Tk 300 extra for a 12kg cylinder in some areas, while the additional amount reaches Tk 440 in others. Prices are also higher than the official rates in markets outside the capital.

On 2 November, the Bangladesh Energy Regulatory Commission (BERC) set the price of a 12kg LPG cylinder at Tk 2,060. The 12kg cylinder is the most widely used size for household cooking.

A visit to 15 LPG shops in different parts of Dhaka on Saturday found that 12kg cylinders were selling for Tk 2,350 to Tk 2,500. Sellers were also charging an additional Tk 1,200 to Tk 1,400 for 45kg cylinders.

When the new prices were announced, the commission for importers of 12kg cylinders, covering storage and bottling costs, was increased by around Tk 82. The distributors' commission was raised from Tk 50 to Tk 85, while the retailers' commission went up from Tk 45 to Tk 70. However, distributors and retailers claim that these commissions are insufficient to cover their costs.

On the issue of higher prices, two major LPG importing companies say they have increased supplies and that action should be taken against those charging consumers extra. Distributors, on the other hand, allege that there is a supply shortage and that some companies are also charging higher prices.

BERC Chairman Jalal Ahmed told Prothom Alo that the commission had received complaints about sales at higher prices and was working on the issue. It was also examining the extent to which LPG consumption in the industrial sector had increased.

"Two members of the commission are visiting the field. Those who buy LPG from other suppliers instead of importing it themselves are mainly responsible for selling it at higher prices. BERC is also looking into this," he said.

With gas connections unavailable and LPG prices high, a household in Dhanmondi has turned to a traditional wood-burning stove for cooking.

More than 10 million consumers use LPG in Bangladesh. Around 80 per cent of the fuel is used for household cooking. Demand for LPG began rising sharply in 2015 after new household gas connections were suspended. Annual LPG demand in the country now exceeds 1.8 million tonnes.

Nearly 99 per cent of the sector is controlled by private operators, who import and distribute the fuel. The remaining 1 per cent is produced and supplied domestically by a state-owned company.

According to the LPG Operators Association of Bangladesh (LOAB), the organisation representing LPG importers, and BERC sources, the country imported 158,000 tonnes of LPG in August, 156,000 tonnes in September and less than 142,000 tonnes in October. However, another 40,200 tonnes arrived in the country by 4 November. LOAB has repeatedly warned distributors against selling LPG at prices above the official rates.

Abu Sayeed Raza, chief marketing officer of Meghna Fresh LPG, told Prothom Alo that the company was supplying LPG at maximum capacity from its four plants. It was also supplying companies that were unable to import the fuel themselves. Therefore, LPG supplies in the market should remain normal. Market surveillance by law enforcement agencies should be strengthened.

Some importers say there is a shortage of LPG in the global market. Supplies from the Middle East have almost come to a halt, while only negligible quantities are available from African countries. Most of Bangladesh's LPG imports are now coming from the United States, where importers have to pay higher prices. Shipping costs for bringing LNG from the United States have also increased. Moreover, Bangladesh lacks sufficient infrastructure to store large quantities of LPG. Importers also risk incurring substantial losses if they build up stocks and the conflict in the Middle East ends, causing international prices to fall.

Azam J Chowdhury, former president of LOAB, told Prothom Alo that ensuring LPG supplies had become more important than prices amid the prevailing global situation.

"Even though we are importing LPG at higher prices, we are supplying it at the rates fixed by BERC. If LPG prices increase, consumer numbers will fall, which is not what operators want. However, anyone is selling LPG at whatever price they wish in shops across the country. Proper monitoring is necessary to prevent this," he said.

According to the LPG Gas Traders Cooperative Society, BERC has not extended the same benefits to distributors and retailers as it has to importers. The increase in commissions has also fallen short of their requirements.

The society said market supplies had yet to improve. Trucks had to wait for long periods at company plants to collect LPG, adding to their costs. Some companies were also charging higher prices.

Abu Taher Qureshi, treasurer of the society, told Prothom Alo that distributors could supply LPG at the commissions set by BERC outside Dhaka, but doing so in the capital was simply not feasible because of high transportation costs.

Distributors are therefore unable to sell at the officially fixed prices, he said.

The Directorate of National Consumer Rights Protection is also aware that cylinder gas is being sold above government-fixed prices.

Its Director General Md Zahirul Islam told Prothom Alo, "We are receiving reports of higher prices. In many cases, sellers keep the gas hidden and sell it discreetly. We have already conducted drives in different areas and fined some businesses. We conducted another drive last Thursday, and these operations will continue tomorrow as well."

Visits to eight retail shops and four dealer outlets in Shewrapara in Mirpur and Sector 12 of Uttara found that 12kg cylinders were selling for Tk 2,350 to Tk 2,500 at all the outlets.

However, most sellers were reluctant to sell gas to anyone other than familiar customers. They feared that the prospective buyers might be journalists or officials from the Directorate of National Consumer Rights Protection. When customers approached them, they often claimed that no gas was available.

When this correspondent tried to buy gas from a shopkeeper named Md Sayem in Mirpur's 60 Feet area, he initially said there was no gas and that it would be available in two days.

The correspondent later collected his phone number and called him two hours later to enquire about supplies. The seller first asked about the caller's identity. After verifying the caller's name, identity and home address, he confirmed that gas was available. However, he quoted a price of Tk 2,500.

At a shop in Uttara Sector 12, a retailer named Asadullah Noor was found selling 12kg cylinders for Tk 2,400. He claimed that he had bought each cylinder for Tk 2,250.

Prothom Alo correspondents collected price information from markets in five upazilas outside Dhaka on Saturday. They found that LPG cylinders were selling for Tk 40 to Tk 240 above the government-fixed price.

In Sitakunda of Chattogram, 12kg LPG cylinders were selling for Tk 2,100 to Tk 2,400. In Bagmara of Rajshahi, prices ranged from Tk 2,200 to Tk 2,300, while in Bauphal of Patuakhali they were selling for Tk 2,100 to Tk 2,200. In different shops in Sakhipur of Tangail, some sellers were charging Tk 2,200 and others Tk 2,300.

Jahangir Talukder, owner of Jahangir Enterprise, a dealer in Sakhipur, told Prothom Alo that companies were unable to supply gas according to demand. His business had not received any gas from the company so far this month, resulting in a temporary shortage in the market.

In various markets in Dharmapasha upazila of Sunamganj, including Badshaganj, Gachhtala, Dharmapasha and Joyshree, 12kg cylinders were selling for Tk 2,100 to Tk 2,200.

Rafiqul Islam of Haji Traders, a distributor at Dharmapasha East Market in the upazila headquarters, said they were supplying cylinders to retailers in all markets across the upazila at Tk 2,020 to Tk 2,030.

Among neighbouring countries, Bangladesh has the highest LPG prices. Prothom Alo published a report on the issue on 7 October, which found that LPG prices in Bangladesh were more than twice those in Kolkata, India.

However, India sells LPG through state-owned agencies and also provides subsidies. LPG prices in Pakistan, Nepal and Sri Lanka are also lower than in Bangladesh.

The Bangladesh Petroleum Corporation (BPC) received government approval to import LPG in January, but it has yet to import any.

M Shamsul Alam, energy adviser to the Consumers Association of Bangladesh (CAB), told Prothom Alo that BERC had rushed to set higher prices, effectively facilitating business interests. On top of that, billions of taka are being extracted from consumers by selling LPG at even higher prices. Yet the state remains silent, and there is no remedy within the energy sector's administration. This raises questions about the image of a democratic government.

[Prothom Alo correspondents in Sitakunda, Bagmara, Bauphal, Sakhipur and Dharmapasha contributed to this report.]