Bangladesh is importing LPG at broadly normal levels, yet consumers are struggling to buy cylinders at the regulated price, as some operators have reduced supplies to the retail market while they wait for higher import costs to be reflected in the next price adjustment.
As a result, although the government and LPG businesses say there is no overall shortage, consumers are having to pay Tk 400-600 above the official set price, and autogas stations say supplies have become inadequate.
National Board of Revenue data show Bangladesh imported 1,23,975 tonnes of liquefied petroleum gas in July and 1,57,760 tonnes in August.
Another 1,18,742 tonnes entered the country during the first 22 days of September. Bangladesh Energy Regulatory Commission Chairman Jalal Ahmed told The Daily Star that imports had reached around 1,26,000 tonnes by Monday.
“Imports are normal. There is no problem with imports,” Ahmed said.
He said imports during several months preceding August had generally remained between around 100,000 and 118,000 tonnes, while August saw a comparatively high 1,57,000 tonnes.
The available figures therefore do not indicate an import collapse behind the latest retail crisis.
Yet consumers are seeing a very different picture.
BERC fixed the September retail price of a 12kg LPG cylinder at Tk 1,585.
The Daily Star spoke to at least 10 consumers who recently bought LPG cylinders from retailers in their neighbourhoods, and all said they had to pay around Tk 2,000 or more.
Some reported paying as much as Tk 2,200 — Tk 615, or nearly 39 percent, above the regulated price.
Prime Minister’s Information and Broadcasting Adviser Dr Zahed Ur Rahman yesterday said LPG supply and stocks remained satisfactory, citing assurances from importers and operators at a recent meeting with Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood Tuku.
He said prices had nevertheless risen in some places despite adequate stocks, prompting the minister to warn all concerned to remain vigilant so that no one could hoard LPG with an ulterior motive to create public discontent.
But conversations with LPG businesses suggest the present disruption is occurring after the fuel enters the country.
The Daily Star spoke to at least four representatives of LPG operators, all of whom said fresh cargo costs had increased sharply amid disruptions in international supply. None wanted to speak on record.
They said premium and shipping costs had risen again in recent weeks, widening the gap between actual replacement costs and the assumptions reflected in BERC’s current regulated price.
“Because those additional costs cannot immediately be passed on to consumers under the monthly pricing mechanism, some operators have reduced supplies to the retail market while waiting for the higher costs to be reflected in the next BERC price adjustment,” said a managing director of an LPG company, requesting anonymity.
The president of the LPG Operators’ Association of Bangladesh could not be reached despite repeated calls.
The crisis is also evident in the autogas market.
Serajul Mowla, president of the Bangladesh CNG and LPG Autogas Station and Conversion Workshop Owners Association, said stations had been receiving inadequate LPG since the middle of September.
“We usually get LPG after placing orders with the operators, but this time the supply is inadequate. Most of our stations across the country are running dry,” he told The Daily Star.
The association met BERC on Monday and urged the regulator to take necessary measures, he said.
“We are now waiting for the outcome. I think the supply will increase once the new price is set.”
Company-wise NBR data also show a narrower pool of active importers. Thirteen companies imported LPG in August, but only 10 did so during the first 22 days of September.
Delta LPG, Bashundhara LP Gas and Padma LPG, all of which imported in August, recorded no imports during the September period.
Bangladesh currently consumes an estimated 17-18 lakh tonnes of LPG annually, according to data presented at the energy ministry meeting on Monday, which translates to an average monthly demand of roughly 142,000-150,000 tonnes.
Around 80 percent of LPG is used by households, while industrial and commercial consumers account for 12 percent, autogas 5 percent and the remaining 3 percent goes to other users.
The latest disruption follows repeated instability in the LPG market since November last year.
Imports weakened in December and January, while difficulties securing vessels from the Middle East pushed retail prices above BERC-fixed rates. In January, imports fell to around 105,000 tonnes from about 126,000 tonnes in December.
The market came under renewed pressure after the US-Israel war on Iran began, pushing up international LPG prices, freight and procurement costs.
In early April, BERC raised the regulated price of a 12kg cylinder by nearly 29 percent to Tk 1,728, yet consumers were still paying around Tk 2,000-2,200 in Dhaka. Later that month, the regulator raised the price again to Tk 1,940 as import costs climbed further.
The difference this time is that the regulator itself says overall imports are not the problem.
Ahmed said BERC had already met LPG distributors and autogas representatives and would also approach operators and bottlers over the current situation.
No formal instruction has yet been issued to the LPG operators’ association over the latest disruption.
BERC is expected to announce its next monthly LPG price on October 4, as October 2 and 3 are public holidays, Ahmed said.
source : thedailystar
