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BERC cuts LPG prices

Published : 02 Dec 2021 10:05 PM

The Bangladesh Energy Regulatory Commission has set new retail prices by lowering the price of Liquefied Petroleum Gas (LPG) supplied by private companies.

The price of 12kg cylinders will now cost Tk1,228, down from Tk1,313. Before this, the price of LPG has been increasing for consecutive five months. Prices of LPG cylinders were increased by Tk422 during the period. 

However, the commission did not re-fix the prices of the LPG gas sold by the state-owned LP Gas Ltd (LPGL) due to no change in its production cost. The current price of the 12.5kg LPG cylinder sold by LPGL is Tk 591.

The new price rate will be effective from December 3, BERC Chairman Abdul Jalil on Thursday said while announcing the new price at a virtual press conference.

For the LPG cylinders of different sizes, the prices will be reduced by Tk7 per kg.  

On the other hand, the price of gas used by vehicles has also been reduced to Tk 57.28 per cubic meter for the month of December, which was Tk61.18 last month.

The price of per kg centrally controlled (reticulated) LPG has decreased from Tk106.19 to Tk99.08.

BERC has been adjusting the price every month based on the Saudi Contract Price (CP) of Propane and Butane. Propane and Butane are the two components of LPG, which Bangladesh imports from the international market.  

According to experts, Saudi CP (Contract Price) is usually set at the end of each month to make it effective for the following month. It normally takes up to ten days for a shipment of fuel to arrive in Bangladesh. 

Private operators previously were at liberty to set their prices on their own. But on 12 April this year, the BERC determined and set the price for LPG for the first time, both for the public and private sectors.

Currently, the country consumes around 11 lakh tonnes of LPG each year as the usage ranges from cooking to refueling vehicles. Some 28 private operators are fulfilling around 98 percent of the total demand.

BERC for the first time fixed the retail level LPG price on April 12 this year after holding a public hearing to comply with a High Court order. Before this, the price of LPG was set by the private operators on their own. 

At that time the price of a 12 kg cylinder was fixed at Tk 975. However, it did not implement in the market. No government agency has been responsible for its implementation.

Consumers have long been alleging that retailers demand prices as per their will due to lack of strict regulation and also lack of proper display of price tag on the cylinders. The price goes up in various situations. 

Many cylinders contain less quantity of LPG than mentioned. There is also a risk of accidents as many cylinders are not manufactured as per the international specifications, it is alleged.

The government is discouraging natural gas connections or supply in pipelines in the sector due to the gas crisis. LPG is recommended as an alternative to ensuring fuel safety.