Household consumers of liquefied petroleum gas (LPG), sold in 12-kilogram cylinders, are forced to pay extra amount despite prices being fixed by the government.
According to sources, a 12 kg cylinder of LPG is priced at Tk 891 fixed by the government. However, retailers are selling the same amount of LPG between Tk 1,000 and 1,150.
The LPG Operators Association of Bangladesh (LOAB) is working to prevent the government's initiative to prevent the LPG market anarchy. As a result, the consumers have to buy LPG cylinders at higher prices.
Earlier, Bangladesh Energy Regulatory Commission (BERC) had set new retail prices for the first time by lowering the retail price of LPG on April 12 after a public hearing with all parties. Following that meeting, BERC is constantly adjusting LPG 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.
Meanwhile, LOAB termed ‘unreasonable’ the retail price of LPG fixed by BERC saying that the decision to lower the price of LPG is ‘one-sided’. BERC officials, nevertheless, said the new retail price is logical and realistic.
BERC Chairman Abdul Jalil told Bangladesh Post, “We have already formed a committee (in view of the price difference). After verifying LPG market scenario, they will submit a report and we will take necessary action. However, so far, we have not received any specific complaint from any customer in this regard. We would, however, take legal action if we receive any complaint on retailers selling LPG cylinders at higher prices.”
“On the other hand, we have also written to the operators to inform us at what price they are selling LPG to their dealers. Besides, operation has already been conducted through mobile courts to check and prevent price hike. Such vigilant operation will be intensified once the corona virus situation is somewhat normal. We continue our efforts to ensure that LPG is sold at fair prices in the market,” Jalil added.
A high official of BERC said that the commission has requested the Ministry of Commerce and the Ministry of Power, Energy and Mineral Resources to take steps for the local administration to implement the fixed price. Directorate of National Consumers Right Protection has also started taking action on the basis of the complaint. On July 12, an LPG auto gas filling station in Cox's Bazar was fined Tk 15,000 for selling LPG at a higher price.
The current fixed price of LPG auto gas used in vehicles is sold at Tk 44 per liter, which was earlier sold at Tk 41.74. It is alleged that in many filling stations auto gas has been selling at taka 45 per litre for two months.
According to BERC price, a 12.5 kg state-owned LPG cylinder will cost Tk591, while the private LP gas cylinder of 12 kg will cost Tk891. However, LPG operators in the country are not implementing the prices fixed by the regulator.
LOAB has been objecting to the price announced by BERC from the very beginning. They also applied for a public hearing to set new price again. In view of this, BERC issued a notification for hearing on July 7 and 8. However, it was adjourned due to coronavirus situation.
Meanwhile, LOAB has written a letter to BERC on July 12 requesting it not to launch any operation till the public hearing. In a letter to LOAB on July 15, the BERC said it would take legal action if it did not implement the announced price.
Azam J Chowdhury, President of LOAB, told Bangladesh Post, "We are never against the commission’s decisions. However, when commission officials take a decision, it is their responsibility to decide whether it is legal or not. There are incompetent people in BERC. Members understand nothing about LPG prices. They do not know where LPG is used. As a result, they did not set fair prices. We will go to court for justice.”
“The government is subsidizing electricity, diesel and LNG. There is no subsidy in LPG. If the government wants to reduce the price, then they can give subsidy here. If prices are not adjusted logically, everyone's business will be closed,” he added.
Energy expert, Professor M Shamsul Alam said, “There are state-owned companies in any sector to control the market. They will meet most of the market demand. However, in our country the scenario is reversed. As a result, the capacity and marketing system of government LPG companies are not being modernized.”
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. LPG is relatively new in Bangladesh, but the demand is increasing day by day.
About 20 private companies have been operating in the market with more than 95 percent market share by annually importing 1.2 million metric tons of bulk LPG from mainly Middle-East while the state-owned LP Gas Company is locally producing 25,000 MTs of LPG from locally produced condensates at different gas fields.