LPG market booming without regulations

A file photo shows a man arranging LPG cylinders in Dhaka. Consumption of liquefied petroleum gas in the country has been increasing at a faster pace since 2013 with growing allegations of charging higher prices and supplying the cooking gas without maintaining quality and quantity. — New Age photo

Consumption of liquefied petroleum gas in the country has been increasing at a faster pace since 2013 with growing allegations of charging higher prices and supplying the cooking gas without maintaining quality and quantity.
Ban on providing new gas connections to households since 2013, price fall and rise of consciousness among eligible people about hazardous arrangements of daily cooking are the major reasons for the booming market, said officials.
‘Last year, the annual consumption exceeded 4,00,000 tonnes of LPG, which was less than 1,00,000 tonnes until 2013. Market players’ estimates say that the annual consumption would exceed 6,00,000 tonnes by the end of this year,’ state minister for power, energy and mineral resources Nasrul Hamid told New Age on Saturday.
Bangladesh has 40 million households and commercial units that require cooking gas and of them, demand from only 3.7 million is met by supplying natural gas through pipelines, he said.
The minister, however, admitted that the absence of regulations in the sector was creating dissatisfaction among the consumers.
He said that the price of each cylinder (12kg) of LPG could be reduced by up to Tk 200 if the market was regulated properly.
‘We are planning to set the market price of LPG by the Energy Division. Different prices would be set for different districts,’ he said, adding that the price of LPG would be reduced further if the country had deep sea port facilities to import LPG.
Landlords, flat owners and tenants in residential buildings and restaurants in Dhaka, Mymensingh and Chittagong divisions were forced to start using LPG for cooking from 2013 as the gas distribution utilities stopped providing new gas connections for cooking since then.
Until 2013, the country’s annual LPG consumption was 80,000-90,000 tonnes, of which state-run oil companies under the Bangladesh Petroleum Corporation supplied approximately 20,000 tonnes while the rest of the demand was met by the private companies, said officials.
People in the urban areas with gas supply facilities through pipelines have started accepting the reality that they would have to use LPG for cooking, said Nasrul Hamid.
Energy expert M Tamim, also a petroleum engineering professor at Bangladesh University of Engineering and Technology, said that the country’s LPG market was growing fast without regulations.
There are allegations of charging higher prices for the cooking gas and supplying it without maintaining quality and quantity, he said.
Some local syndicates have developed that offer people LPG at cheaper rates by bottling the cooking gas in makeshift arrangements, which is not only harmful for the market but also serious threat to public safety, Tamim said.
‘Buyers of such LPG cylinders get the cooking gas with poor quality and quantity,’ he said.
A regulatory mechanism is a must to ensure public safety and quality and quantity of the supplied LPG by promoting healthy competitiveness for all market players, Tamim said.
Six to seven private companies are supplying LPG now while another four to five will join the market in six months, which is a positive sign for creating and maintaining a competitive market, he said.

Source: New Age

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