Govt allows BPC to import LPG to ease crisis

In the context of the ongoing crisis and price hikes in the country, the Bangladesh Petroleum Corporation (BPC) has received an approval to import liquefied petroleum gas (LPG).

The state-owned corporation has been granted this approval in principle on a government-to-government (G2G) basis.

Muhammad Fouzul Kabir Khan, adviser to the Ministry of Power, Energy and Mineral Resources, confirmed the matter to Prothom Alo on Sunday night. He said, “BPC has been granted an approval in principal to import LPG.

The chairman of BPC, Md Amin Ul Ahsan, has already been given verbal instructions to start the process. An official letter is being sent. The government will now initiate the import of LPG on a government-to-government basis. Once imported, supply in the market will increase and balance will be restored.”

Muhammad Fauzul Kabir Khan stated that, for the time being, the government will only be involved in the import of LPG. There are currently no plans for direct involvement in storage, bottling, or distribution activities. These tasks will be carried out through private operators.

In light of the recent LPG shortages, the BPC submitted a formal request to the secretary of the Power, Energy, and Mineral Resources Division on 10 January, seeking authorisation to import LPG. The correspondence highlighted that, as the domestic market is entirely privatised, the state's capacity for market intervention during a crisis remains constrained.

Consequently, the government lacks the necessary levers to address supply deficits or combat artificial scarcities. Following this appeal, the BPC has been granted the requisite permission to commence imports.

According to sources within the BPC, Indonesia, Malaysia, China, and Qatar have been identified as potential sources for importing LPG via government-to-government (G2G) arrangements. The initiative to commence imports will prioritise nations capable of supplying LPG at competitive prices and under more favourable terms.

When asked for comment, BPC Chairman Md Amin Ul Ahsan told Prothom Alo, "The LPG market in the Persian Gulf region—specifically Qatar, Kuwait, Oman, Saudi Arabia, and the United Arab Emirates—is substantial. Furthermore, Indonesia and Malaysia are also significant players in this sector. We intend to procure LPG from nations that can facilitate imports within a relatively short timeframe and under favourable conditions. Informal discussions have already commenced with several countries, and we anticipate that formal negotiations will begin shortly."

Officials at the BPC have indicated that negotiations will be pursued with the most advantageous partners, with a focus on international market rates, shipping costs, and contractual terms. A primary consideration in these discussions will be the reliability of supply. The overarching objective remains to bolster market availability by securing LPG within the shortest possible timeframe. In line with these efforts, the BPC convened a meeting today, Sunday, with several private-sector LPG distributors.

Various regions across the country are currently experiencing an LPG shortage. In many areas, 12kg LPG cylinders are unavailable at the government-mandated rates. Due to these supply pressures, the market price for cylinders has escalated to an unprecedented degree.

The Bangladesh Energy Regulatory Commission (BERC) reports that 52 companies have obtained licences for LPG operations in the country. Among these, 32 companies possess their own bottling plants.

While 23 companies have the capacity to import, only 17 managed to do so at various points throughout the previous year. Furthermore, a mere 8 companies maintained a reliable monthly import schedule. Although some firms initiated imports at the start of the year, several suspended their operations towards the latter half.

In 2023, LPG imports reached 1.275 million tonnes, rising to 1.61 million tonnes in 2024. However, imports fell to 1.465 million tonnes last year, representing a 10 per cent decline compared to the previous year.

Consequently, the reserve stocks intended for year-end stability were completely exhausted to meet market demand. This has led to a supply deficit that can no longer be bridged, leaving consumers unable to secure LPG cylinders even at twice the standard price.