It has been three years since the government decided to set the LPG (liquid petroleum gas) pricing, but the effort remained futile due to influences of some vested interest groups.
As a result, consumers are paying more for LPG cylinders with no policy whatsoever in place.
The move was initiated by the Energy Division to formulate a LPG pricing policy to reduce the price.
But each LPG cylinder (12.5kg) is now being sold in the local market at Tk 1,100-1,200 whereas, a committee of the government's Energy Division had calculated that the price should not cross Tk 730.
Three years back, the Energy Division moved to formulate the LPG pricing policy as per the government's order. The government was trying to promote LPG as cooking gas replacing piped natural gas, distributed by the state-owned Titas and other gas companies.
Identifying high market price of LPG as a barrier to its promotion, the Energy Division held a stakeholders' meeting with the participation of the LPG marketing companies.
Taking their opinion into consideration, it formed a committee to draft a formula to fix the pricing at the retail market.
The committee, headed by the then additional secretary Kazi Zebunnesa Begum, found that after all the expenses a 12.5kg LPG cylinder should not be sold at above Tk 703.
The committee, comprising representations from public and private sectors, made a recommendation to introduce labelling of maximum retail price (MRP) on the cylinders and make it mandatory for traders to sell it at the fixed rate.
“But some… blocked the move by their influence on the political level,” said a senior official at the Energy Division preferring anonymity. Also, the recommendation of fixing the price could not be implemented due to opposition from some major companies.
A good number of companies, including two from the public sector, are operating in the LPG business in the country. The major private operators are Omera, Bashundhara, Beximco, Total Gaz, Klean Heat, Jamuna, Orion, Bin Habib and Super Gas (TK Gas).
Disagreeing with the concept of fixing the price, Jakaria Jalal, general manager (strategic planning) of Bashundhara LPG, said it would be unrealistic to fix the LPG price for retail market as the price of the product is linked with the oil price in global market, where it fluctuates all the time.
He rather put the onus on some unfavourable policies pursued by the government that hiked up the LPG prices. He cited high licence fee of Bangladesh Energy Regulatory Commission (BERC) and limitation in importing over 3,000MT LPG vessels as examples.
Energy Division Additional Secretary Muhammed Ahsanul Jabbar, now in-charge of LPG related affairs, admitted the inordinate delay in finalising the LPG price policy. “We're working on it and the retail pricing formula will be in place within the next six months.”
Contacted, State Minister for Power and Energy Nasrul Hamid expressed his frustration over the delay. “I'm not happy with the overall performance of the Energy Division as it achieved only 9 percent in the ADP (annual development programme) implementation.”
Industry insiders noted that in spite of the high price, LPG market is growing gradually in the country. In 2016, the total LPG market was around 400,000 MT and the demand shot up to over 500,000 MT this year.
