LPG prices outrun official rate
Consumers across Bangladesh are being forced to pay hundreds of taka above the government-fixed price for bottled LPG as a severe supply shortage pushes up retail rates, adding to household expenses amid already elevated living costs.
A 12-kg LPG cylinder was selling for Tk1,830 to Tk2,100 in different parts of the country on Sunday, Tk245 to Tk515 above the Bangladesh Energy Regulatory Commission (BERC)-fixed price of Tk1,585 announced on September 10.
The price surge has been accompanied by acute shortages, with many retail outlets reporting that they had no cylinders in stock despite consumers being willing to pay the higher prices.
The public sector LPG operator, LP Gas Limited (LPGL), has kept the price of its 12.5-kg cylinder unchanged at Tk777. However, its market share remains small compared with private distributors, limiting its ability to ease the wider shortage.
Industry insiders attributed the crisis primarily to a sharp decline in pipeline gas supplies, which has forced household, industrial and commercial consumers to turn increasingly to bottled LPG.
According to Petrobangla, national natural gas demand is currently around 4,000 million cubic feet per day (mmcfd), against supply of about 2,600 mmcfd.
Petrobangla has domestic gas extraction capacity of around 2,750 mmcfd and regasification capacity of 1,100 mmcfd through two floating storage and regasification units (FSRUs) at Moheshkhali.
However, disruptions in the global LNG market have sharply increased procurement costs, further constraining overall gas availability.
BERC Member (Gas) Md Mizanur Rahman said private operators imported and supplied around 126,000 tonnes of LPG in September, compared with 100,000-106,000 tonnes during the same period in previous years.
Despite the higher volume, he said, the shortfall in pipeline gas had created an unprecedented increase in demand that existing LPG distribution networks were struggling to meet.
The supply pressure has been compounded by higher international LPG prices and sharply increased ocean freight charges.
For September, Saudi Aramco set its contract prices (Saudi CP) at $625 per tonne for propane and $660 per tonne for butane, up from $620 and $640 respectively in August. Local operators use a 35:65 propane-to-butane ratio in producing bottled LPG.
Capt Mainul Ahsan Khan, deputy managing director of Smart Group of Industries, the parent company of BM Energy, said conflicts in the Middle East had restricted global LPG availability, allowing wealthier countries to outbid local importers for supplies.
“BERC set the retail price based on a freight benchmark of $160 per tonne, but actual international freight charges have surged to $400 per tonne,” Khan said.
“Private operators cannot absorb such heavy losses continuously without government subsidies. Most importers are running out of stock,” he added.
Field visits to Bakalia, Chandgaon and Lalkhan Bazar in Chattogram found widespread shortages, with dealers saying bottling plants had halted or sharply reduced deliveries over the previous three days.
The shortage has pushed retail prices well above the official rate. JMI’s 12-kg cylinders were selling for around Tk1,850, while Fresh and Jamuna cylinders were priced at Tk1,830-Tk1,880. Total and Omera cylinders were selling for Tk1,900-Tk1,950, while Beximco composite cylinders were priced as high as Tk2,100.
The higher prices and limited availability are putting additional pressure on households and businesses that increasingly depend on LPG because of inadequate pipeline gas supplies.
BERC officials said they had held meetings with LPG producers and importers to stabilise distribution and restore regular supply through the market.
