It is necessary that the interest of consumers be protected when setting the price of any essential commodity whether it is produced in the country or imported. In this case, Bangladesh Energy Regulatory Commission (BERC) has been fixing the price of imported liquefied petroleum gas (LPG) for four months and this was necessary.
Currently, the private sector imports LPG and 27 small or big companies are involved in this. They import LPG from Singapore, Malaysia and the Middle East. At the beginning, the LPG importers’ body, LPG Operators Association of Bangladesh (LOAB), welcomed the BERC initiative but they haven’t been attending the meetings of the price coordination committee. Yet, BERC has increased the LPG price in the name of price adjustment in several phases since April. BERC last raised the price of LPG cylinders weighing 12kg by Tk 102 to Tk 993 and that is set to come into effect on 1 August. Before that, the price of LPG increased by Tk 49 a cylinder.
And the matter of concern is that the importers aren’t abiding by the BERC’s decision and selling LPG at a higher price. They claim import and transportation of LPG costs more plus prices vary bit based on the country. Bangladesh consumed about 1.1 million tonnes of LPG in 2019-20 fiscal and sees a 35 per cent rise in domestic consumption annually. Import of LPG is on rise because of decline in natural gas production and supply. No new gas connection to households is being installed either.
Bangladesh Petroleum Corporation (BPC) plans to build a large terminal in Matarbari and import LPG by big carriers. And, it would reduce expense. According to BPC, currently, the cost to ship a tonne of LPG in a 2,000-to 3,000-tonne carrier is between $100 and $110. But, if LPG is shipped in a 35,000-to 40,000-tonne carrier, costs would decrease to $65-70 a tonne. It saves $35 to $40 a tonne of LPG and price of a 12kg-LPG cylinder, the mostly used one in the country, will decrease by Tk 300.
However, the government’s plan to import LPG should not go in vain by any means. Establishment of the terminal would at least take 3-4 years. Till then, import of LPG under government initiative can’t stop. To import LPG, the government can follow the process that they use to import diesel furnace oil. If cost to import LPG drops traders should not have any objection either.
Private sector importers would not take the matter positively and that can be realised seeing their initial reaction. And the importers’ logic on the government has no experience on import and maintenance of LPG can’t be accepted either. They too had no knowledge until importing LPG to the country. We think if LPG is imported under both government and private sector initiatives, there will be a healthy competition between both parties as much a benefit for consumer. Consumer interests must get priority in the government’s plan and programmes.