LPG crisis: The key concerns spelled out by operators

LPG industry operators have raised concerns over market distortions caused by retailers charging prices above officially set rates, warning that such practices are fuelling public anxiety amid the ongoing supply crunch.

In a statement issued yesterday (4 January), the LPG Operators Association of Bangladesh (LOAB) said recent retail-level price hikes have confused consumers and added to their financial burden, despite government assurances that there is no supply crisis or restriction on imports.

The issue was discussed at a meeting held at the energy ministry, where industry representatives pointed to rising global freight costs and higher LPG prices in Europe and other international markets as factors disrupting the supply chain.

However, LOAB maintained that the country's overall LPG stock remains "satisfactory" and said the ministry had assured operators that no ceiling would be imposed on LPG imports.

The association expressed concern that some retailers were selling cylinders at prices higher than those announced by the regulator, aggravating the situation for consumers.

"Such practices are creating unnecessary hardship for consumers and confusion in the market," the statement said.

LOAB urged the government to take immediate and effective action against retailers violating pricing rules, calling for stricter monitoring and enforcement to restore discipline in the market. It also stressed the need for stronger supervision to ensure LPG is sold at government-approved prices, noting that transparency and stability are critical for the sector.

The concerns come as the government and LPG industry stakeholders agreed on a set of temporary measures to ease the ongoing LPG crisis, including VAT relief on imports, access to lower-interest loans and faster processing of bank letters of credit (LCs).

At an emergency meeting at the energy ministry, officials said the proposals would require final approval from the Bangladesh Bank and the National Board of Revenue (NBR). The ministry plans to formally request the NBR to temporarily reduce VAT at the bottling stage, while the central bank will be asked to consider extending green financing facilities to LPG operators at single-digit interest rates.

Joint Secretary Monir Hossain Chowdhury said discussions with companies confirmed that no operator had sold LPG above the prices fixed by the Bangladesh Energy Regulatory Commission (BERC), adding that price manipulation had mainly occurred at the retail level.

Industry leaders said weak oversight and a lack of visible enforcement had allowed irregularities to spread. LOAB President and Delta LPG Managing Director Amirul Haque said global market volatility had forced Bangladesh to seek LPG from new sources, including Argentina, while reiterating the demand for temporary VAT withdrawal, as LPG receives no subsidy unlike LNG.

Operators also highlighted financing challenges, with interest rates for Bangladeshi LPG companies hovering around 15%, compared to easier terms available internationally. They argued that recognising LPG as a green fuel and extending low-cost financing would help stabilise prices for consumers.

The current shortage has been attributed to reduced imports by some companies, a seasonal spike in winter demand and alleged artificial supply constraints at the retail level. Consumers in Dhaka and other areas have reported paying up to Tk2,000 for a cylinder officially priced at Tk1,253 before the latest revision.

The energy ministry has sought approval to empower local administrations to conduct mobile courts against illegal practices, while LOAB said it would continue engaging with authorities on VAT cuts, LC facilitation and stricter action against overcharging retailers.