The authorities increased the prices of liquefied petroleum gas (LPG) twice in April to stop retail sales at higher than government-fixed rate, yet consumers are being forced to pay a substantial extra amount in the absence of proper enforcement.
The rising LPG prices have increased household expenses and operational costs for small businesses, particularly restaurants and roadside food shops that heavily rely on cooking gas.
Low-income families are bearing the brunt of the price hike as many households have shifted to LPG following the decline in new natural gas connections and poor supply of piped gas.
On April 2, the Bangladesh Energy Regulatory Commission increased the price of a widely used 12kg LPG cylinder by Tk 387 to Tk 1,728 from Tk 1,341 in March.
Again, on April 19, the price had been revised up by Tk 212 to Tk 1,940, which resulted in a price hike by Tk 599 within just 18 days.
Visits to several LPG shops in the capital found that despite the revised government-fixed price, vendors are still charging up to Tk 300 extra per 12kg cylinder in different parts of the city.
In some cases, cylinders are being sold for as high as Tk 2,250, against government rate of Tk 1,940 despite there being no supply shortage at present.
However, prices tend to shoot up abnormally when supply shortages occur in the market, consumers said.
Mukta Aktar, a resident of Dakshingaon in Sabujbagh, said her four-member family was struggling to cope with rising LPG prices as her husband was private job holder with limited income.
‘Now, we sometime use LPG and sometime an electric cooker as we have no alternative,’ she said.
Retailers, however, claim they are purchasing cylinders from dealers and companies at higher prices and selling them with marginal profits.
Jahid Islam, an LPG trader in Dhaka’s Agargaon area, said companies and dealers were quoting higher prices, leaving retailers with no option but to sell above the government rate.
Abu Bakar, an LPG vendor in Khilgaon, said that if they sold at the government-fixed price, they would make no profit as dealers charge higher rates.
Md Kalam, a small roadside food shop owner in Purana Paltan, said his daily profit decreased as production costs, including tea preparation, have risen due to the LPG price hike.
Md Selim Khan, president of LP Gas Traders Cooperative Society Limited, however, said retailers were getting 12kg cylinders for around Tk 1,800 from companies, and there was no justification for selling above the government-fixed rate.
He urged LPG vendors to comply with official pricing.
The BERC began fixing monthly LPG prices in April 2021, when the first regulated price for a 12kg cylinder was Tk 975. The price has since nearly doubled to Tk 1,940 within five years.
Industry insiders said the LPG market has expanded rapidly due to declining domestic natural gas production and the suspension of new household gas connections through pipelines.
Currently, around 80 per cent of LPG is used in households, 12 per cent in industrial and commercial activities, and 8 per cent in the autogas sector.
Consumers Association of Bangladesh president AHM Shafiquzzaman said there was no justification for charging prices beyond the government-fixed rate, as the price is determined by including reasonable profit margins for traders.
Noting that a 12kg LPG cylinder is now selling for Tk 2,200 by venders, Shafiquzzaman, also a former secretary, said that ‘it is unethical and unfair.’
He urged the Directorate of National Consumers’ Right Protection and local administration to intensify market monitoring and conduct regular drives to ensure LPG is sold at government-fixed rates to reduce financial burden of consumers.
BERC member (Gas) Md Mijanur Rahman has told New Age that surveillance has been strengthened through local administrations across the country to ensure LPG sales at government-fixed prices.
‘We are not increasing prices arbitrarily. Prices are adjusted based on international market trends and the dollar exchange rate,’ he said.
Energy expert Professor M Tamim says Bangladesh’s LPG demand is now 1.5 million tonnes annually and is projected to reach 2.5 million tonnes by 2030, marking an increase of nearly 60 per cent over the next five years.
He said demand may rise further to 5 million tonnes by 2041 and 10 million tonnes by 2050, according to his keynote paper presented at a recent energy-related programme in Dhaka.
Professor Tamim also said around $3 billion has been invested in the LPG sector. The private sector supplies 98 per cent of the market demand, while the government sector accounts for only 2 per cent.
He added that there are around 40 million LPG cylinders in the market, while the average monthly LPG market size stands at 130,000 tonnes.
According to Bangladesh Petroleum Corporation and BERC officials, LPG consumption in Bangladesh was 700,000 tonnes in the 2018–19 financial year. It rose to 850,000 tonnes the following year, reached 1.05 million tonnes in 2020–21, and rose to nearly 1.44 million tonnes in 2023–24.
The key LPG companies include Omera, Meghna Fresh, Bashundhara LP Gas, Jamuna Spacetech, BM Energy, Beximco LPG, Green Town LP Gas, Petromax, Delta LP Gas, JMI and Premier LP Gas.
