The highest amount of price increase of liquefied petroleum gas (LPG) in a single adjustment in the country’s history occurred on Thursday, as the price of the widely used 12 kg LPG cylinder jumped by Tk 387.
Even after that, LPG is not available in the market at the fixed price. The retailers are charging at least Tk 400 more than the revised price.
The Bangladesh Energy Regulatory Commission (BERC) announced LPG prices for April yesterday.
According to the new rate, the price of a 12 kg LPG cylinder has been set at Tk 1,728, effective from 6:00 pm yesterday. However, even before that, 12 kg cylinders were being sold in the market at Tk 2,050 to Tk 2,200.
Visiting to a shop in the capital’s Khilgaon area yesterday afternoon, a 12 kg cylinder was seen being sold at Tk 2,150. The retailer said they have to buy cylinders from distributors at prices higher than the government-fixed rate. As a result, it has not been possible to sell LPG at the official price for the past three months.
Govt may monitor importers’ stock
LPG prices have surged due to the spread of war in the Middle East. Last month, BERC adjusted prices based on an import price of $542 per tonne. This time, it has increased to around $783.
Earlier, after the start of the Russia-Ukraine war in 2022, LPG prices crossed $800 per tonne. However, at that time, the depreciation of the taka against the dollar was lower, so prices did not rise as sharply as this time. In February 2023, the price of a 12 kg cylinder had increased by a maximum of Tk 266.
Amirul Haque, president of the LPG importers’ body, LPG Operators Association of Bangladesh (LOAB), told Prothom Alo that imports increased in March and there is currently no supply shortage.
He said BERC will certainly consider the additional premium costs incurred in imports. The government may also conduct drives against higher prices at the retail level.
According to BERC’s new rates, the price has increased by Tk 32.30 per kg in April. The price per kg of LPG now stands at Tk 144.04. Based on this, cylinders of different sizes will be sold. The price of the 12.5 kg LPG cylinder supplied by the state-owned company remains unchanged at Tk 825. Meanwhile, the price of LPG used in vehicles (autogas) has been set at Tk 79.77 per litre, up from Tk 61.83.
One LPG importer said those who had stock in March made several millions of taka in profits. There should not be a temptation for extra profit, and LPG could be sold at the BERC-set price. The government may also monitor the stock of importers.
However, another importer said that although the increased LPG price has been considered, the higher shipping cost has not been taken into account. BERC adjusted prices assuming a premium of $120 per tonne including freight, but currently ships are not available for less than $350 to $400. Therefore, LPG will not be available at the BERC-set price. If the war continues, supply may decline again in May.
Countering the argument of the importer, BERC Chairman Jalal Ahmed told Prothom Alo that the premium was calculated based on import cost documents.
He, however, said a discussion with the traders will be held on Sunday regarding their objections.
If additional import costs can be shown, adjustments will be made. Otherwise, imports may be disrupted. However, there is no scope for selling at higher prices in the market, he added.