The Bangladesh Energy Regulatory Commission (BERC) has set new retail prices for the first time by lowering the price of Liquefied Petroleum Gas (LPG) at the consumer level.
According to the new price, a 12.5 kg state-owned LPG cylinder will cost Tk591, while the private LP gas cylinder of same weight will cost Tk975. The price was made effective from Monday.
At present, the private companies have been selling 12 kg LPG in the retail markets at between Tk 1100 and Tk 1200 while those of the state-owned company at around Tk 700.
BERC Chairman Abdul Jalil made the announcement at a virtual press conference on Monday. A notice in this regard has also been given on the website of the commission.
However, the price will be adjusted 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.
BERC chairman Md Abdul Jalil said that legal action will be taken against those who try to sell LPG cylinders at a price higher than the stipulated price.
He further said it will be very tough for them to ensure the enforcement of the new LPG prices as they don’t have any mechanism or offices at the district or upazila level.
“We’ll need to formulate some new rules and regulations to ensure the effectiveness of the new prices of LPG,” he said adding that the administrative bodies will have to enforce the price by their own administrative measures.
“BERC is regulator, not an enforcement agency”, he defended his position saying that this is first time the regulator announced the LPG prices.
The price of per litre of reticulated LPG was fixed at Tk 0.1756 while the price of per litre of auto-gas now stands at Tk 47.92. The BERC also fixed prices for different sizes of LPG cylinders.
According to the new price at retailer level owned by private sector, 12.5 kg LPG has been fixed at Taka 1,017 at retailer level, 15 kg at Taka 1,220, 16 kg at Taka 1,301, 18 kg at Taka 1,464, 20 kg at Taka 1,627, 22 kg at Taka 1,789, 25 kg at Taka 2,032, 30 kg at Taka 2,440, 33 kg at Taka 2,683, 35 kg at Taka 2,846 and 40 kg at Taka 3,659.
On January 14, the Commission has taken up the initiative to fix the retail price of LPG through conducting public hearing, where licensees and other stakeholders took part.
According to the law, the price must be announced within 90 days after the public hearing (meeting of all the stakeholders engaged in LPG business).
Earlier, the Consumer Association of Bangladesh (CAB) had filed a writ petition seeking fixing of LPG prices through a public hearing. Following the hearing of the writ petition, the court had directed the BERC to hold a public hearing and fix the price of LPG.
Although LP gas has been marketed in the country for the last three decades, its price has not been fixed by the government so far.
At present, LPG cylinders are being sold at different prices in different parts of the country. It is alleged that the price of LPG is relatively high in the capital due to high demand.
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.
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.
Consumers say that retailers demand prices as per their wish due to a lack of strict regulation and also lack of proper display of price tag on the cylinders. The price goes up in different 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.
In addition to residential purposes, various other uses of LPG have been started. Meanwhile, LPG has been introduced in the country for vehicles, which is mainly used as fuel for transportation. Autogas can be found at lower prices than petrol and compressed natural gas (CNG).