Bangladesh Bank (BB) has relaxed the single borrower exposure limit for liquefied petroleum gas (LPG) importers until 31 December, seeking to ease letter of credit (LC) processing and stabilise supply after recent disruptions.
In a circular issued on Wednesday, the central bank said loans for LPG imports will no longer be subject to the standard cap of 25 per cent of a lender’s capital. Instead, permissible exposure will be determined by BB.
The directive takes immediate effect and will remain in force until the year-end deadline.
The move follows supply strains earlier this year, when several major LPG bottlers reduced imports due to financial stress after the political transition in August 2024, leading to shortages in January and February.
Authorities had earlier allowed financially stronger firms to scale up imports and reduced value-added tax burdens to support the sector.
The latest step focuses on easing credit constraints that limited some firms’ ability to open LCs and sustain import volumes.
Market participants said the relaxation could help importers that had reached borrowing limits resume procurement and improve supply consistency.
“The relaxed single-party exposure limit should help resume imports by some firms,” said Mohammed Amirul Haque, president of the LPG Operators Association of Bangladesh, adding that continued policy support would be needed beyond December.
Haque also said BB’s recognition of LPG as a green fuel could enable access to concessional financing at around 5 per cent interest, potentially lowering costs for operators and consumers.
