LPG Cylinders' Prices Seen Frequent Rise

The price of liquefied petroleum gas (LPG) has been increased again in the last fortnight. In the private sector, the price of 12 kg cylinder LPG including VAT has been increased from Tk 993 to Tk 1,033. Gas cylinder prices have risen several times in the last three months. The Bangladesh Energy Regulatory Commission (BERC) has held a public hearing on the price hike.

The public hearing held to change the price of LPG at the consumer level was attended by individuals and organizations involved in the storage and bottling of private LPG and representatives of consumers. On the other hand, there have been several public hearings on setting the price of this gas. In addition, the price of this product is adjusted almost every month. The question in the minds of consumers is why the price of this essential product is changed so often?

The use of LP gas in different sectors is increasing day by day in Bangladesh. Especially in cooking, it is becoming an alternative to government gas connection.

Sultana Doel, a resident of the Elephant Road area of ​​the capital Dhaka, said she has been using LP gas for cooking through cylinders for the past five months. However, two gas cylinders are needed to meet the cooking needs of a family of four. It costs around Tk 4,000 to buy a total of 45 liters of gas in two cylinders. Consumer Association of Bangladesh, an organization working on consumer rights, started fixing the price of LPG in 2020 after a lawsuit was filed by Consumers Association of Bangladesh (CAB).

Shamsul Alam, the company's energy adviser, said the LPG traders had not applied to the BERC for pricing for a long time.

Shahadat Hossain, assistant director of the Energy Regulatory Commission in Bangladesh, said the issue of public hearings and price adjustment was a little different. LPG prices are adjusted every month. And public hearings are in special cases.

He also said that LPG is a product that is imported from abroad. And this is the reason why if the price fluctuates in the international market, the price of the product is also adjusted in Bangladesh. This is what BERC does.

Why do prices change so often? Energy expert said the answer to this question. Ijaz Hossain said LPG is an import-dependent product in the country as Bangladesh is not self-sufficient in gas production. After refining the crude oil in a refinery, about 10 products besides oil come out as by-products. LP gas is one of them. Due to which, whenever the price of oil or similar products fluctuates in the international market, the price of this related product also fluctuates. Such products do not have a specific price. One day even the price changes due to the difference in hours. And this is why the price of LPG also changes frequently. According to him, there is not much to do but endure such price fluctuations.

He further said that the price of LP gas has not been brought under control as it has not been under any control before. Due to which the people of Bangladesh are not very familiar with this effect. But in other cities around the world, he said, it is a daily incident.

Former teacher of Bangladesh University of Engineering. Ijaz Hossain said if the government could stockpile a certain amount of LPG by importing it so that it could be used during price hikes, it would be possible to stabilize the price adjustment. However, this time can never be more than three months.

On the first day of this month, the price of LPG gas cylinder went up again. The price of a cylinder has been increased by Tk 25. With this, the price of gas has been increased by around Tk 190 this year. Ordinary people are naturally worried about their foreheads.

Although the government has fixed the price of LPG, no policy has been formulated so far for the pricing of the private sector. The ministry has also held several meetings with businessmen in this regard; But the final decision could not be made. However, it is important to have control in the interest of the customers and to establish order in the LPG business. The government has not been able to control the price of private LP gas for a decade. Private businessmen have not been able to reach a decision on the issue despite repeated discussions with the government. Most recently, the Energy Department of the Ministry of Power, Energy and Mineral Resources has made recommendations to the BERC on price control of LP gas.

Experts say it is important to ensure that the Bangladesh Energy Regulatory Commission (BERC) can take steps to determine the price of LPG as well as natural gas through a hearing. The companies were requested to write the maximum retail price on the bottle. They can do it easily. This allows the end customer to get LPG at the right price. The highest retail price is written on all packaged products in the country; But the traders are not willing to write the price on the LPG cylinder. They say that since the issue depends on the international market, it is not possible to write the price of LPG in this way.

Demand for environmentally friendly LP (liquefied petroleum) gas has been increasing in rural and urban areas for several years; But with the increase in demand, the price of this gas is also increasing. However, the price of LPG is much higher in Bangladesh than in other Asian countries. Like Bangladesh, Sri Lanka and Malaysia have gas but India, Nepal or Bhutan do not have their own gas. But the price of LP gas in those countries is lower than in Bangladesh. Apart from this, as Nepal and Bhutan do not have their own seaports, these LPGs are unloaded at the Indian port of Kolkata and transported to their home countries. As a result, the transportation cost of LPG is much higher in both the countries, which does not apply to Bangladesh. In this regard, even though India came with a subsidy to popularize LP gas, the Bangladesh government did not give a subsidy. Not only in India, but also in many countries including Thailand, the government subsidizes this cooking gas.

According to official sources, the government has no plans to subsidize LPG imports at the moment.

The country's natural gas reserves are declining. Again, 25 percent of the forest is supposed to be remained, but only 6 percent have. In this situation, if the use of LP gas can be increased in the villages, the use of wood as fuel will be reduced and the forest will be protected. There are no rules and regulations regarding LPG service security system, marketing, pricing etc. It's like a free market. So there is no alternative to supervision to bring order in this market. A law must be made for this.