Pay Tk 223 more for 12 kg LPG cylinder from 8 PM

Bangladesh's consumers had to pay an extra 252 taka last month too to keep cooking as gas prices rose. In October, a 12 kg LPG cylinder cost 1,837 taka. In November, buying that cylinder will cost 223 taka more. That is, within one month, the price of a 12 kg cylinder rose to Tk2,060. As a result, the price of liquefied petroleum gas per kg stands at 171.68 taka.

The Bangladesh Energy Regulatory Commission (BERC) announced this new rate on Monday, effective from 8 PM.

Cylinders of various weights from 5.5 kg to 45 kg have risen at the same rate. Autogas used in vehicles was not spared either. The price of autogas per litre has been raised from 84 taka 62 paisa to 91 taka 95 paisa. In October, the price of autogas was raised from 73 taka 9 paisa to 84 taka 62 paisa.

On the other hand, although unchanged for a long time, this time the price of LPG supplied by the government company has been increased. The price of a 12.5 kg cylinder has been raised from 825 taka to 1,860 taka. However, the supply of this gas is so low that it remains out of reach of ordinary consumers.

LPG prices rose after the war began in the Middle East. When the ceasefire began, prices in the global market started to fall. Although for several months prices have been fluctuating. Again, LPG is never sold in the country's market at the government-set prices. Even before this fresh price hike, retailers were selling a 12 kg cylinder at 2,200 to 2,500 taka. It is feared that the price may now rise further.

LPG importers say they are selling LPG at the government-fixed price. But distributors and retailers are creating an artificial crisis and charging people whatever price they wish.

Last Thursday, at a public hearing organized by the Bangladesh Energy Regulatory Commission, importers, distributors and retailers proposed increasing the commission on LPG and autogas sales, citing rising costs of various kinds. There, for the most widely used 12 kg cylinder, Omera demanded raising the current commission of 200 taka to 478 taka, Petromax to 349 taka, and Delta to 360 taka. However, Meghna Group proposed the lowest, 300 taka.

On the other hand, distributors applied to raise their commission from 50 taka to 150 taka, and retailers from 45 taka to 70 taka. In addition, a proposal was made to raise the commission per litre of autogas used in transport from 8 taka to 11 taka.

Subsequently, BERC's technical committee favored raising importers' commission from 200 to 280 taka, dealers' from 50 taka, and retailers' commission from 45 taka to 70 taka.

Citing arguments in favor of increasing the commission, Abu Sayeed Raza, chief marketing officer of Meghna Fresh LPG, said at the public hearing, "Before the war in the Middle East, the premium on LPG imports, including ship fares, was 80-120 dollars per tonne. Now it has reached 250-400 dollars. Operating costs have increased. Taking everything into consideration, a price should be set so that no one in the market can charge even one taka more than the fixed price."He said, "Bangladesh's LPG market is growing rapidly. Currently, there is an investment of 40,000 crore taka in this sector. It is important to ensure the protection of this investment. Large ships arrive at Kutubdia, and from there, using lighterage and road communications, the gas is delivered to various parts of the country. That cost was not added in the 2021 public hearing."Citing various complexities in the LPG business, operators said that 31 licenses must be obtained to do this business. Money must be paid at every stage together with fees amounting to about 3 crore taka.BERC sets the price of LPG every month in line with international market prices. When this pricing was first set on April 12, 2021, the price per cylinder was 975 taka. That price has now become 2,060 taka. During this time, prices sometimes rose, sometimes fell, and sometimes remained unchanged.In January of this year, the price of 12 kg LPG was set at 1,253 taka. In February it rose to 1,356 taka; with a VAT reduction it fell by 15 taka to 1,341 taka; in March there was no change; then in April it rose by a total of 599 taka in two rounds—first 387 and then 212 taka—bringing the cylinder price to 1,940 taka. After that there was some relief: in June it was reduced by 55 taka and in July by 357 taka; in August it was raised again by 70 taka to 1,598 taka; in September it was reduced by 13 taka to 1,585 taka, and then in October it was set at 1,837 taka.The main ingredients for making LPG, propane and butane, are imported from various countries. Every month, the Saudi company Aramco publishes the prices of these two LPG components. This is known as the Saudi Contract Price (CP). BERC adjusts the domestic LPG price based on this Saudi CP as the base price. BERC calculates the dollar rate for the entire month by averaging from the invoice values of importing companies.