Banks told to fast-track LPG financing
Staff Reporter :
To stabilise the volatile liquefied petroleum gas (LPG) market, the interim government has instructed commercial banks to expedite loan approvals and the opening of letters of credit (LCs) for LPG importers.
The Energy and Mineral Resources Division issued a circular on Thursday directing relevant authorities to prioritise financial transactions related to LPG imports. The directive was signed by Deputy Secretary Mia Mohammad Keyamuddin.
The move follows a meeting with the LPG Operators Association of Bangladesh (Loab), during which importers highlighted difficulties in securing timely financing amid the high-demand winter season. At the meeting, Loab urged banks to fast-track loan disbursements and LC processing to ensure uninterrupted LPG supply.
In line with the meeting’s outcomes, the ministry instructed concerned agencies to ensure swift and priority handling of all LPG-related loan and LC applications to help normalise market supply.
The decision comes as the country faces a severe supply shortage and sharp price hikes, placing consumers under mounting pressure. Loab also proposed declaring LPG a green industry and allowing access to easy-term financing from Bangladesh Bank’s Green Fund. According to the circular, such measures would help overcome sector-specific challenges and enable operators to sell LPG at government-fixed prices.
The Energy Division noted that around 98per cent of the country’s LPG demand is met through private sector imports. Supply constraints typically intensify during winter due to global shipping bottlenecks, while reduced pressure in domestic pipeline gas systems forces more households and industries to shift to LPG cylinders. This seasonal surge has resulted in an acute shortage, with 12kg cylinders reportedly selling for Tk1,500 to Tk1,800 in some areas — far above the government-set January price of Tk1,306.
Alongside financial facilitation, the Ministry of Power, Energy and Mineral Resources on Thursday formally submitted a major tax revision proposal to the National Board of Revenue (NBR). The proposal includes reducing the value-added tax (VAT) on LPG imports from 15per cent to below 10per cent, removing the existing 7.5per cent VAT at the local production stage, and exempting traders from advance income tax.
NBR officials confirmed receipt of the proposal and said it is under review to ensure any tax relief translates into lower consumer prices.
Welcoming the government’s initiatives, Loab President Amirul Haque said the measures would help ease the ongoing LPG crisis in the near future.