Cylinders sold at inflated price

Staff Reporter :
During the market visit the Directorate of National Consumer Rights Protection (DNCRP) has found that the traders are selling cylinders of liquefied petroleum gas (LPG) at inflated price denying the government fixed rate.
Recently, the Bangladesh Energy Regulatory Commission (BERC) has increased the price of 12 kg LPG cylinder by Tk 266 fixing it at Tk 1498.
But DNCRP’s market monitoring teams found that 12kg LPG is being sold at between Tk1,600-Tk1,800 in the market.
The BERC fixes the price of LPG at the beginning of every month as per law.
“From LPG companies’ selling points to retailers’ selling points – everywhere the LPG cylinders are being sold at inflated prices”, said AHM Shafiquzzaman, Director -General (Additional Secretary) of the DNCRP wat a meeting with LPG operators, dealers and retailers at the DNCRP headquarters in the city on Wednesday.
He claimed consumers are paying additional Tk 215 crore every month to buy one LPG cylinder. Bottlers, dealers and retailers are collectively pocketing this money unlawfully.
“We have found many evidences of cylinder price manipulation during our raid in various places,” he said, adding, “But this malpractice cannot be prevented only by raiding,” said Shafiquzzaman.
He also claimed that the DNCRP has enough evidence that the price of LP gas is being kept high at mill gate.
Against the allegation of the DNCRP, all the LPG operators, dealers and retailers were blaming each other.
In addition, the LPG operators were also blaming the dollar crisis, devaluation of local currency and banks’ reluctance in opening LC while the Consumers Association of Bangladesh (CAB) was blaming inaction of the BERC and DNCRP for anarchy in the LPG market.
“We have to pay banks Tk 106 as dollar exchange rate against the previous rate of Tk 85”, said Mahbub Alam of Meghna LPG.
He said the freight charge of shipping has gone up to $120 from $90 per tonne while costs of electricity and transportation have increased. “All these have pushed up our production costs, but BERC is not considering such costs while it announces price every month”, said Jakaria Jalal, head of marketing of the Bashundhara LPG.
Representatives of dealers and retailers said that the BERC has not increased the margin of dealers despite all their costs having gone up.
BERC Secretary Khalilur Rahman disagreed with the allegations of the LPG operators and dealers saying that the regulator has asked them for submitting valid documents of their cost escalation.
“But none of the dealers and LPG operators submitted the valid documents. Rather they sought more time in this regard”, he added, without any valid documents, BERC cannot consider their claims of cost escalations.
CAB representative Kazi Abdul Hannan said both the BERC and the DNCRP substantially failed to protect the rights of the consumers.
The consumers are being the ultimate victims and they are paying the price of the regulatory bodies’ failure, he added.
The Director-General of the DNCRP said his office will submit a recommendation to the government’s higher authority to take further action in this regard.
He said it will be unwise to take action against companies like Bashundhara whose market share is over 20%.
“If we stop their production, do you know what will be the impact on the market?” he told a reporter responding to his question about the non-action by the DNCRP.
He also said that the ground reality is that the BERC raised the 12kg LPG price by Tk 266 for the current month. But the price has gone up further in the local market.
“If again the LPG price is raised by Tk 300, the market will not be cool. Rather, market operators will raise it further. We experienced this in the case of sugar price”, he said.