LPG operators pledge higher imports to ease supply crunch

Twelve companies in the LPG sector have pledged to import 1,67,600 tonnes in January and 1,84,100 tonnes in February in an effort to ease the ongoing supply shortage.

Sources at the Energy Division said the commitments were made yesterday at a meeting attended by Energy Adviser Fawzul Kabir Khan, LPG traders, Bangladesh Petroleum Corporation (BPC) officials, and other stakeholders.

According to the LPG Operators Association of Bangladesh (LOAB), only 60,000 tonnes of LPG were imported during the first 20 days of the month, far below market demand.

The meeting included representatives from Navana LPG, TMSS LPG, SKS LPG, BM Energy, Petromax LPG, JMI Industrial Gas, Omera Petroleum, Jamuna Spektek, LAFS Gas, Delta LPG, United iGas, and Meghna Fresh LPG.

Officials said the energy adviser instructed all parties to make every effort to prevent any LPG shortage during Ramadan, when demand peaks in households, restaurants, and hotels.

He emphasised that the import commitments for January and February must be fully implemented, assuring that the government would extend all necessary support to facilitate timely imports.

The meeting also recommended that the Bangladesh Bank will not impose any restrictions on LPG imports. The Energy Division will send a formal letter to the central bank conveying the recommendation, which was endorsed by the chairman of the Bangladesh Energy Regulatory Commission.

Concerns were raised that the change in government expected in the second week of February, followed by the start of Ramadan in the third week, could further exacerbate the supply crisis. The adviser urged LPG traders to ensure uninterrupted supply during this critical period.

Energy Division approves BPC imports

To address the shortage, the Energy Division earlier approved LPG imports through the state-owned BPC, with the gas to be distributed via existing private operators. The official order reached BPC's office yesterday.

A senior BPC official, speaking on condition of anonymity, said the corporation lacks the capacity to market the imported LPG on its own. BPC plans to import the fuel and distribute it through private companies. Several meetings have already been held with operators, and demand estimates are currently being collected.

The official also cited challenges in importing LPG, including a global shortage of vessels due to US sanctions. Large countries such as Russia and India have booked a significant number of ships. 

While LPG may be sourced under government-to-government agreements, unloading cargo from mother vessels to lighter vessels poses another challenge, as BPC does not have the required ships.

In such cases, suppliers would need to provide lighter vessels, significantly increasing costs. Given these constraints, the official said BPC is unlikely to begin LPG imports within the next week.

Despite repeated meetings over the past 20 days, the government has yet to find a lasting solution to the LPG crisis, which has already had a widespread negative impact on daily life.

The shortage began in mid-December after several major LPG companies, including Beximco and Bashundhara, halted imports. As a result, the price of a 12-kg LPG cylinder has risen from Tk1,300 to between Tk1,800 and Tk2,000, with even higher prices reported in some areas. Traders are allegedly exploiting the crisis by making additional profits at each stage of resale.

Bangladesh currently has around 50 million LPG cylinders. Of these, 16 million are supplied by the five largest groups, while the remaining 34 million are supplied by other companies. However, many of these cylinders remain empty as smaller operators struggle to import LPG.

Industry sources said the country's monthly LPG demand is around 1,50,000 tonnes. Imports in November and December amounted to 1,00,000 tonnes and 1,23,000 tonnes, respectively, creating a significant supply gap in the market.