LPG price jumps by Tk35-50 per cylinder
Retailers claimed that the LPG suppliers have asked them to hike the price, citing the price increase of raw material in the international market as an excuse
Highlights
- 12.5 kg LPG cylinder now retails at Tk810
- The price was only Tk730-760 last month
- Companies blamed price hike of raw material in global market
- They claimed that raw material price increased by $20-25 from September
- BPC can only supply 2% of total annual demand, which is around 1 million tonnes
Public expenditure for cooking fuel has jumped in the country as the price of liquefied petroleum gas (LPG) increased by Tk35-50 per cylinder within the span of just one week.
Last month, the price of a 12.5kg LPG cylinder was Tk730-760, which has now reached Tk765-810. The latest price hike has added to the public suffering caused by an almost year-long financial slowdown due to the Covid-19 pandemic and recent floods.
Keep updated, follow The Business Standard's Google news channel
North and north-eastern customers are likely to be forced to spend more money on LPG, as transporting the product from storage facilities located in Mongla and Chattogram increases the cost at the consumer level, said industry insiders.
This swelling in the price of LPG will hit the jobless poor and low-income people the hardest.
Abida Sultana, a housewife residing in the Munshipara area of Rangpur, said she bought a cylinder at Tk800 on Tuesday, which was only Tk760 in last month.
"We are going through a financial crisis as our income dropped due to the pandemic. This price hike will make our lives even tougher," she added.
Meanwhile, retailers told The Business Standard that the LPG suppliers have asked them to hike the price, citing the price increase of raw material in the international market as an excuse.
Raihan Sharif, a LPG cylinder dealer in Rangpur City Corporation, said, "We have nothing to do about the issue, as our head office hiked the price. We have to sell LPG at the hiked price just to make even a tiny profit."
Jakaria Jalal, general manager of the Bashundhara LP Gas Ltd – which is leading the market by fulfilling 24% of the country's demand, said, "We still did not increase the retail price in the local market.
"Some of the brands have already increased the price, but we are still selling LPG at our previous rate."
Propane and Butane are the two components of LPG, which Bangladesh imports from the international market. Stakeholders said the price of the raw material has increased by $20-25 compared to the previous month.
Asian countries, including Bangladesh, refer to Saudi state-owned Aramco's monthly Contract Price (CP) for setting up LPG price in their respective local markets.
Aramco had set its Contract Price for propane at $375 per tonne for the month of October, which is up from $365 in September. Meanwhile, the Saudi company set its CP for Butane at $380 tonne, up from $355 last month.
Mohammad Yasin Arafat, director at the Jamuna Gas said, "We have increased the product price by Tk35-50 compared to last month's price.
"The latest price has been adjusted considering both the cost of raw material and the wheeling cost of the product to reach the last mile of the consumer demand."
Jamuna Gas holds a share of 11% of the total LPG market in Bangladesh.
Under the circumstances, the consumers are suffering from the additional burden of hiked LPG prices, as the country's market is dominated by private companies. Besides, the state-owned distributor and regulators are yet to take any action in this regard.
The Bangladesh Petroleum Corporation (BPC), the sole state-owned fuel importer which also imports LPG alongside private companies, can only supply 2% of the total annual demand, which is around 1 million tonnes.
Currently, private investors and distributors are fixing the LPG price based on the open-market method. However, the companies have faced a long running allegation of forming a syndicate to manipulate the LPG price in their favour, and thereby depriving the consumers.
In December last year, the Bangladesh Energy Regulatory Commission (BERC) began to formulate a guideline for setting up the LPG price in Bangladesh under the directive of the Energy and Mineral Resources Division.
The BERC was supposed to finalise the guideline by September 30 this year.
Commenting on the issue, Md Maqbul-E-Elahi Chowdhury, member (Gas) at the BERC said it will take another 15 days to finalise the pricing guideline.
