Liquefied Petroleum Gas (LPG) prices have been increased yet again amidst supply shortages and widespread allegations of selling LPG above government-fixed rates in the market.
The Bangladesh Energy Regulatory Commission (BERC) set the consumer-level price of a 12 kg LPG cylinder at Tk2,060, marking a Tk223 hike from the previous rate of Tk1,837. According to a notice issued by the commission on Monday evening, the new price comes into effect from 8pm.
The commission attributed the price adjustment to rising prices on the international market, alongside an increase in commissions for importers, dealers, and retailers.
Alongside cylinder gas, the price of autogas used in motor vehicles has been increased to Tk91.95 per litre from Tk84.62, up from Tk73.09 per litre in September.
In a public hearing held on October 29, the technical evaluation committee of BERC had proposed raising the 12 kg cylinder price from Tk1,837 to Tk1,976. However, the commission ultimately fixed a higher rate in its final notice.
Despite the new price announcement, doubts remain over whether consumers will be able to purchase LPG at government-fixed rates. Last month, despite a Tk252 hike setting the official price at Tk1,837, 12 kg cylinders were sold for Tk2,200 to Tk2,300 in various areas of the capital city.
During market instability starting from the third week of September, prices reached up to Tk 2,500 per cylinder in some places.
Supply chain commission hikes, market allegations
As part of the latest price adjustment, commission charges across various stages of the supply chain have also been raised.
Importers’ storage and bottling charges, which include transportation costs from the operator’s plant to distributors, have been increased from Tk200 to Tk281.76 per 12 kg cylinder.
Dealers’ charges have been raised from Tk 50 to Tk 85, while retail vendors’ commission has been increased from Tk45 to Tk70 per cylinder.
Towards the end of September, LPG importers faced allegations of reducing supplies citing international market price increases.
A report by a state intelligence agency noted that after international LPG prices rose by $64 per tonne, five companies almost halted sales from September 22. The report specified that these companies hoarded thousands of tonnes of LPG in order to sell them at higher rates.
Pricing mechanism, consumer grievances
BERC announced monthly LPG price determinations for the first time on April 12, 2021. It was specified at the time that the base import price would fluctuate according to rates announced by Saudi Arabia.
However, any changes to freight charges or commissions for importers, dealers, and retailers would require a new public hearing. The commission has announced LPG prices every month since then, having increased commissions twice during this period.
At the latest public hearing on October 29, consumers questioned BERC’s role in controlling the market after failing to obtain LPG at fixed prices.
Meanwhile, distributors and retailers blamed importers for the supply situation, while representatives of importers, distributors, and retailers proposed almost doubling commissions across various levels.
