As there is high demand for scrap, one of the main components in the production of rods, some unscrupulous traders are selling subsidized LPG cylinders to the re-rolling mills.
As a result, the LPG (Liquefied Petroleum Gas) sector is under threat. The businessmen of this sector have demanded quick punishment of those dishonest people who are flouting the law.
Sources said, the LPG cylinders are made of high quality steel. The average cost of making a 12 kg LPG cylinder is around taka 2,500 to 2,700.
The LPG operators are selling these cylinders to the distributors at subsidized price of taka 600-700.
As per rule, distributors have to send the returned empty cylinders from the customers to the factory of the company concerned for refill. Recently, however, the return of empty cylinders has decreased.
Over the last one year, many people have been selling LPG cylinders as scrap illegally. Currently, the price of per kg scrap iron is around taka 60. After scrapping, a cylinder is sold for around taka 700. Besides, its valve is being sold at taka 80-100.
Azam J Chowdhury, president of LPG Operators Association of Bangladesh (LOAB), said good quality steel is used in the manufacture of LPG cylinders. Currently the market for the steel is booming. Some unscrupulous traders are scrapping cylinders and selling them to various steel factories. That’s a very risky job indeed as to scrap the LPG cylinder, according to the rules, it has to be degasified first. Otherwise, if it is cut or broken, it can cause a terrible explosion.
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“LOAB has already filed a lawsuit to prevent it. Besides, a letter has also been sent to the department concerned. We have requested the authorities to take punitive action against those involved in such activities,” he added.
According to the Cylinder Act-1991, under no circumstances shall the cylinder be scrapped, cut or damaged. If the cylinder is damaged, it should be cut or broken in the presence of the officials of the department concerned.
According to rules, LPG operators and gas-related companies have to inspect a cylinder every 10 years. It can be reused only if it maintains its specific value at that time and gets clearance from the Directorate of Explosives.
An official of the Directorate of Explosives said that there were restrictions on breaking, melting or even hitting the cylinder. If that is to be done, the cylinders declared unusable by the Directorate of Explosives may be scrapped. Otherwise, it will be a punishable offence.
In January, 4,324 cylinders worth around taka 43 lakh of several companies and their cut parts were seized from in front of Safiul Alam Steel Mills on Kotbari Bishwa Road in Cumilla. LOAB also filed a case in this regard.
On July 11 last year, police raided a warehouse of a trader in Tulatli area of Sitakunda in Chattogram district and seized about 10,000 LPG gas cylinders, scrap cylinders and empty bottle cutting material.
LPG traders say that if the trend of illegal sale of cylinders continues, the LPG sector will be threatened. Traders in this sector have large investments in cylinders. Traders bring that profit by doing business for a long time. If those high priced cylinders are sold or turned into scrap, they will incur losses in the long run. The unscrupulous syndicate is trying to destabilize the price of LPG by creating a cylinder crisis in the market by scrapping cylinders.
According to LOAB, there are 3.5 crore cylinders of 27 operators in the country. However, the exact number of cylinders returned to the companies for refill was not known.
According to Bangladesh Petroleum Corporation (BPC) and LOAB sources, a total of 58 companies in the country have received licenses for LPG business. Out of these, 27 companies are currently active in the market. Of these, 20 companies import directly. The investment in this sector has been about taka 30,000 crore.