BERC’s one-sided tariff to ruin LPG industry: Stakeholders

The country's liquefied petroleum gas (LPG) industry is going to be destroyed due to the one-sided tariff announced by the Bangladesh Energy Regulatory Commission (BERC), industry stakeholders have said.

If the government wants the industry to survive, it should offer a realistic tariff, said Azam J Chowdhury, president of the LPG Operators Association of Bangladesh, at a press conference at Intercontinental Dhaka on Tuesday. 

He said the BERC's tariff is arbitrary.

Due to this arbitrary pricing, the LPG market is about to close in many places in the country, he said.

On 12 April this year, the BERC for the first time set the retail price of LPG provided by both public and private operators. It set per kg LPG price at Tk70.17 for June and will set the new price for July at the end of this month.

Questioning the BERC's credentials in placing such a pricing, Azam said there are some major discrepancies in the pricing model.

"They set the pricing for the next month based on that for the current month, which is faulty. At the same time, it is not rational to change auto gas prices each month while diesel and petrol prices are set for a long period," he added.  

He further said if the industry faces any damage and the government faces any embarrassment, the BERC will be responsible for that.

Tanzeem Chowdhury, executive director of Omera Petroleum Limited, delivered the keynote at the programme. He highlighted the industry's contribution to the economy, employment, and public health.

He said Tk30,000 crore had been invested in this sector that had benefited more than three crore people across the country. 

Head of sales at Bashundhara LP Gas Jakaria Jalal and Chief Executive Officer of Omera LPG Shamsul Haque Ahmed pointed out the technical inconsistencies in the BERC's tariff.

They mentioned six areas where the government had deliberately set lower charges, which is now affecting businesses. The areas include distribution cost, retailer cost, and cylinder lifetime.  

"After the tariff was announced, many dealers and distributors across the country have stopped retailing LPG cylinders," Jakaria said.

Shamsul said each operator now spends Tk179 for LPG storage and bottling, but the regulatory commission set Tk143 for this.

"In addition, operators spend Tk91 as sales and administrative costs, which was set at Tk45 by the regulator."

Among others, JMI LPG Managing Director Abdur Razzaue, Beximco LPG Chief Commercial Officer Muntasir Alam, Petromax LPG Director Nafis Kamal, and Orion LPG Head of Operation Anup Kumar Sen were present at the conference.

M Liaquat Ali Khan, secretary general of the association, moderated the event.