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Bangladesh - Corporate - September 9, 2023

LPG price in Bangladesh highest in South Asia

Rafiqul Islam Azad: The price of Liquefied Petroleum Gas (LPG) in Bangladesh is now the highest among South Asian countries, following an increase at the consumer level recently.

On September 3, the Bangladesh Energy Regulatory Commission (BERC) increased the price of LPG by Tk 144 per 12 kg at the consumer level for the month of September.

The price of a 12 kg cylinder is now Tk 1,284, up from Tk 1,140 in the previous month of August. However, LPG is not sold anywhere in the country at BERC fixed prices.

It is known that 12 kg LPG cylinders are being sold for Tk 1,400 to Tk 1,550 depending on the company, in different parts of Dhaka. The retailers indicated that there is a shortage of LPG supply and the price may increase further.

Earlier in August, the price of 12kg LPG gas rose by Tk141.

The LPG witnessed the highest price at Tk1,498 (per 12kg cylinder) in the local market in February this year following the start of the Russia-Ukraine war in February last year.

Talking to this correspondent, a retailer in Jatrabari area on Friday said that there is a shortage in supplying of LPG for couple of days.

He said currently sales a 12-kg cylinder of LPG for Tk 1,550.

Another retailer at Kajla preferring anonymity also said that there is crisis of LPG for last two-three days.

“When I need 100 cylinders, I get only 30. I have no stock of Bashundhara LP Gas at this moment as my stock ended couple of days ago,” he said adding, “I sold per 12-kg Bashundhara LPG at Tk 1,350 two-three days ago.”

Asked about crisis of LPG supply, he said they were informed that there was a shortage of LPG at company level as they cannot import them due to dollar crises.

However, the retailer expects that he may receive new stock of Bashundhara LPG on Sunday.

On the other hand, the LPG is being sold in other South Asian countries at lower price. The LPG is usually sold there at prices set by the respective government; however, there is often a difference in LPG prices from city to city.

The price of LPG in Sri Lanka is the lowest in South Asia. In Colombo, the capital city of Sri Lanka, the price of a 12.5 kg LPG cylinder is 2,982 Sri Lankan rupees. That means, the price of 12-kg cylinder falls to 2,862.72 rupees equal to Tk 983.58. The LPG prices are not the same in other cities of Sri Lanka. In Kilinochichi city, the price of 12.5 kg of LPG is 3,229 Sri Lankan rupees, which is the highest. The price of 12 kg is 3,99.84 Sri Lankan rupees equal to Tk 1,065.

In India’s capital New Delhi, the price of a 14.2 kg LPG cylinder is Rs 903. That means the price of 12 kg LPG falls to Rs 763.10 equal to Tk 1,013.98 paisa. The prices of LPG are also different in other cities of the country. The highest price is in Patna, where the price of LPG cylinder of 14.2 kg is Rs 1,001. That means the price of 12-kg of LPG falls to Rs 845.92 equal to Tk 1,124, which is lower than the official rate in Bangladesh.

The LPG prices have been increased in Pakistan on September 2. Currently, the price of 11.8 kg LPG cylinder in the country is 2,833.49 rupees. That means, the price of 12 kg cylinder falls to 2,881.51 rupees equal to Tk 1,034.14.

The LPG prices have been adjusted in Nepal on August 16. Currently the price of 14.2 kg of LPG stands at 1,660 Nepalese rupees. As a result, the price of 12 kg of LPG fell to 1,402.81 rupees equal to Tk 1,165.93.

On the other hand, LPG prices have recently been reduced in Bhutan. LPG price has been reduced by Rs 200 per 14.2 kg cylinder to Rs 1000. In this, the price of 12 kg of LPG falls to 845.07 rupees equal to Tk 1,123.77.

According to information from GlobalPetrolPrice.com on August 28, the price of LPG per liter in the international market stood at 70 cents or about Tk 77. The price of 12 liters of LPG stands at Tk 924. This means that the price of LPG set by the government in Bangladesh is about 39 percent higher than the international market.

Bangladesh Energy Regulatory Commission (BERC) took the initiative to fix the price of LPG early 2021 to reduce the monopoly business of private companies in the market. The regulator has been fixing the price of LPG since April that year. However, since then, LPG has not been able to match the prices announced by BERC. The price is consistently higher by up to Tk 100-200 at the consumer level.

The main ingredients for making LPG- Propane and butane- are imported from different countries. Saudi Arabian company Aramco publishes the prices of these two components of LPG every month. This is known as Saudi Cargo Price (CP). BERC adjusts LPG prices in the country based on this Saudi CP base price. In this regard, the price of private LPG including Value Added Tax (including VAT/must) has been fixed at Tk 107 per kg from September. As such, the prices of LPG cylinders of different sizes are fixed.

In the price of LPG, the distributor’s charge is Tk 50 and the retailer’s commission is Tk 45 per 12 kg. But the retailers considered the commission as insufficient. According to them, many times the company does not provide gas at the rate set by the government. Some companies keep the price fixed by the government, but the dealers charge more commission. Retailers have to buy at a higher price. That’s why the price of LPG falls more than the price fixed by BERC, alleged the retailers.

The leading LP Gas Companies in Bangladesh include Bashundhara LP Gas Ltd, Index LP GAS Limited, Jamuna Gas, Orion Gas Ltd, LAUGFS Gas (Bangladesh) Ltd, Omera LPG, Totalgaz Bangladesh, JMI LPG, and Navana LPG Limited.

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