LPG imports surge 44%, yet retail consumers see no relief

Liquefied petroleum gas imports increased significantly this month compared with January, offering some relief to a market hit by weeks of supply disruptions. Yet, consumers are still paying well above government-set prices as retail markets struggle to stabilise.

Infograph: TBS

Industry insiders say more shipments sourced from alternative markets, amid tensions in the Middle East, are expected to arrive by the end of February, which could ease supply pressure and bring down prices in the coming weeks.

Data from customs stations in Chattogram and Mongla show that Bangladesh imported about 91,000 tonnes of LPG between 1 and 21 February, up from 63,000 tonnes during the same period in January – a rise of 44%.

In addition to these two ports, private jetties in Sitakunda handle another 20,000 to 22,000 tonnes of LPG imports each month.

But, relief in the retail market has been limited. Retailers blame distributors for charging more than the government-fixed price for cylinders, while distributors point to reduced imports by several firms as the cause of supply gaps.

Despite the rise in imports, consumers in Dhaka and Chattogram are still paying between Tk1,600 and Tk1,700 for a 12kg cylinder, well above the government-set price of Tk1,356. 

Some retail shops in the capital are selling the 12kg cylinder for Tk1,800-Tk2,500, similar to prices during the peak of the crisis in January, when rates surged to between Tk2,000 and Tk2,500 per cylinder.

Retailers say they are buying cylinders from distributors at prices higher than the government-fixed rate.

Amirul Haque, president of the LPG Operators Association of Bangladesh (LOAB), told The Business Standard that there is no major shortage at the consumer level based on current import volumes.

"Importers are selling at government-set rates, but prices are rising at the retail stage," he said, adding that geopolitical tensions in the Middle East had prompted companies to diversify their sourcing.

"Imports from alternative suppliers have already begun and supply is expected to improve quickly," he added.

Shortage linked to earlier import decline

LPG imports fell sharply last November during the interim government period, dropping 44% year on year. Volumes failed to recover in December and January after several companies, including Meghna Group and Delta LPG, reportedly did not receive approval to increase shipments.

The shortage worsened in January as demand rose following disruptions to pipeline gas supply. Authorities later allowed increased imports to address the gap.

According to data from Chattogram, Mongla and Sitakunda, Bangladesh imported 1.754 million tonnes of LPG in the last fiscal year, while daily demand averages around 5,000 tonnes.

Industry sources say 28 companies operate in the LPG market, with 23 authorised to import. Sixteen companies have remained active importers this fiscal year, and nine of them account for 92% of total imports.

At least four companies, including Beximco, have suspended imports, prompting active operators to scale up shipments.

New shipments on the way

Three tankers carrying about 10,000 tonnes of LPG are currently heading to Sitakunda, Chattogram and Mongla ports. Meghna Group of Industries (MGI), the country's largest importer, has five vessels carrying 57,000 tonnes of LPG en route to Chattogram.

Three tankers carrying 24,000 tonnes are expected to arrive between 26 and 28 February, while two additional vessels carrying 33,000 tonnes are scheduled to reach in the first half of March.

An official at MGI, requesting anonymity, said that alongside regular sources, the company has arranged imports from Vietnam, Taiwan and Malaysia to stabilise supply.

"These shipments should reach the country within two weeks and significantly improve availability," he said.

Other importers, including United iGas, Jamuna Spacetech and Omera Petroleum, have also increased imports.

Ctg market still under strain

On the ground in Chattogram, however, pressure remains. Supply has improved slightly, but prices are still elevated and some areas continue to face irregular pipeline gas supply, increasing reliance on LPG.

Visits to markets in Sholoshahar, No 2 Gate, Chawkbazar, Aturar Depot and Technical areas found better cylinder availability than last month, though prices remain unchanged.

At Ashrafia Trading in the Sholoshahar area, daily demand exceeds 200 cylinders, but only about 70% of supply is being met.

Owner Muhammad Shamim said he is buying 12kg cylinders from distributors at Tk1,500 and selling them at Tk1,600, even though the official price was cut by Tk15 to Tk1,341 on Tuesday.

"No one is selling at the government rate because distributor prices remain high," he said.

Consumers bear the burden

Bangladesh's LPG market depends entirely on private imports. Annual demand stands at around 1.7 million tonnes. Of 52 registered companies, 32 operate plants, while only 23 have import capacity. Last year, just eight companies maintained regular imports.

Distributors say reduced imports by several firms earlier created supply gaps that continue to affect the market.

Khorshedur Rahman, president of the LPG Distributors Association, said daily demand in urban areas ranges between 40,000 and 50,000 cylinders, with supply still about 30% short.

He alleged that some traders are exploiting the situation by charging higher prices despite improving supply.

Consumers say limited availability leaves little room for bargaining. Residents in Agrabad, Halishahar, Muradpur and Jamalkhan reported paying Tk200 to Tk300 above the official rate, while some paid even more.

Jamshed Uddin, a resident of Katalgonj area under Panchlaish police station, said he bought a cylinder for Tk1650 today as shops had limited stock.

Questions over enforcement

The Bangladesh Energy Regulatory Commission (BERC) sets LPG retail prices based on international market adjustments. But enforcement remains weak, raising concerns among consumers about monitoring mechanisms.

Although the Directorate of National Consumer Rights Protection carries out occasional drives, traders say the impact is short-lived. 

Retailers say they are caught between higher distributor prices and pressure from customers.

Chawkbazar trader Mohammad Hosen said customers often blame retailers for high prices, even though they themselves purchase cylinders at elevated rates.

Distributor Saiful Islam said higher costs and earlier import shortages had forced many sellers to charge above the official price, though he expects the market to normalise gradually.

"If imports continue uninterrupted, prices may begin easing within two weeks," he said.