The use of Liquefied Petroleum Gas (LPG) in the country has increased by 35 percent every year on an average over the last decade. People are inclined to use LPG as an environment-friendly fuel. In villages too, it has taken the place of earthen oven for cooking, Energy Division official said.
However, consumers are forced to pay extra amount despite price fixed by the government.
New gas connection for household stopped over the last ten years. Consumers and industry insiders said the government is discouraging natural gas connections or supply in pipelines due to the gas crunch.
As the per capita income of people has increased, LPG is recommended as an alternative to ensuring fuel safety. The LPG demand is increasing gradually although it is relatively new in Bangladesh.
State-owned LP Gas Company Limited has prepared a projection report on the demand for LPG in the country’s market. The report says that if the trend continues, the demand for LPG in the country will increase to 70 Lakh tonnes by 2041. To meet the additional demand, the government has, therefore, planned to import LPG.
At present 58 companies have obtained licences for LPG business. However, 28 companies are active in the market. Of these, 20 companies import directly. Investment in this sector has been about Tk 30 thousand crore.
According to the Energy Division, the total supply of LPG in January 2009 was 45,000 MTs. Now the quantity has increased to around 12 lakh MTs. Of this, around 98 percent is being supplied by the private operators. The state-owned company has met the rest of 2 percent of the demand.
However, currently the annual demand is around 16 lakh tonnes.
At present, there are 20 terminals, with storage capacity of one lakh MTs.
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. Some officials are getting unethical benefits while the people are losing.The market will expand further if the LPG market is made competitive,” he added.
According to Bangladesh Petroleum Corporation (BPC), around 70 percent households in the country currently use fuelwood, dried dung and biomass for cooking.
The rest of them use natural gas and LPG. There are around 40 lakh LPG consumers, while a total of 3.5 crore cylinder across the country. In 2016, the LPG business grew by 100 percent. In 2017, it stood at 123 percent.
The LP Gas Company report says that in 2041, the demand for 1.5crore households in the city will increase by about 34 lakh tonnes. The demand of upper and middle income families in the village will be 22 lakh tonnes. The demand for vehicles may be 14 lakh tonnes. According to the report, BPC is officially considering importing 10 to 12 lakh tonnes of LPG a year as demand continues to rise.
BERC has set new retail price for the first time by lowering the retail price of LPG on April 12. The BERC has been adjusting the price every month based on the Saudi Contract Price (CP) of Propane and Butane, which are the two components of LPG, which Bangladesh imports from the international market. However, LPG operators are violating BERC’s recommended price. Private LPG operators are selling LPG at a higher price.
Consumers grumble that sellers increase prices at their whim. Many cylinders contain less quantity of LPG than mentioned. There is also a risk of accidents as many cylinders are not being stored properly.
BERC Chairman Abdul Jalil told The Bangladesh Post, “We have already formed a committee (in view of the price difference). However, so far, we have not received any specific complaint from any customer. We would, however, take legal action if we receive any complaint on retailers selling LPG cylinders at higher prices.”
Azam J Chowdhury, President of LPG Operators Association of Bangladesh (LOAB) told The 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. BERC Members understand little about LPG prices. They do not know where LPG is used. As a result, they did not set fair prices.”
“The government is subsidizing electricity, diesel and LNG, but there is no subsidy in LPG. If the government wants to reduce the price, they can give subsidy here. If prices are not adjusted logically, everyone’s business will be closed,” he added.