LPG prices go up

Retailers charge Tk 1,500 a cylinder, but producers say the price should be Tk 1,400

A man checks a cooking stove before selling a gas cylinder in the capital. Photo: Star/File

A man checks a cooking stove before selling a gas cylinder in the capital.

Prices of liquefied petroleum gas (LPG) increased by Tk 40-Tk 80 a cylinder this month, burdening consumers during the holy month of Ramadan.
In addition, prices of the cylinders will go up by around Tk 500 a cylinder this month, as the government has raised duty on cylinders to 10 percent from 3 percent.
Private companies said they hiked the price of the cooking gas by Tk 40 a cylinder (12.5 kilograms) to Tk 1,330 from July 1, following a global price hike. Although consumers are supposed to get the item at a maximum of Tk 1,400 a cylinder, including a margin for distributors and retailers, consumers are being forced to buy it at Tk 1,500.
“From July 1, we have raised the price of gas by Tk 40 for a cylinder due to an increase in raw material prices in the international market,” said Mujibur Rahman, general manager of TotalGaz Bangladesh.
Rahman said his company would also implement the new price for imported cylinder from July 15. Presently, TotalGaz sells a cylinder at Tk 2,000, which will go up by Tk 500, pushing the consumers’ initial investment up. Consumers purchase a cylinder and refill it with LPG.
LPG, which is considered a safe and eco-friendly fuel, is made by mixing butane and propane at a 70:30 ratio.
State-run Saudi Aramco has increased its July contract price for propane at $795 a tonne, up $50 from the June level. The price of butane also went up by $20 a tonne to $790. The prices provide a benchmark against which Middle East sales of LPG to Asia are priced.
Market players said despite the price hike of raw materials in the international market, retail prices of gas should in no way exceed Tk 1,400 a cylinder.
Local companies Bashundhara and Jamuna Spacetech produce cylinders and market gas. TK Group only makes cylinders and French Total and Australian Kleenheat sell LPG by importing gas and cylinders.
“Yes, we have raised the gas price by Tk 40 a cylinder,” said Belayet Hossain, managing director of Jamuna Spacetech. However, he could not instantly share the price at which Jamuna sells a cylinder of gas.
Retailers blamed the market players for charging higher prices than what they say.
“We cannot buy a cylinder of gas for less than Tk 1,400. So, we sell it at Tk 1,500, including delivery costs,” said Zakir Hossain, a retailer in the city’s Kalabagan area.
Presently, Bangladesh consumes one lakh tonnes of LPG a year, 80 percent of which is imported and the rest is produced by state-run Bangladesh Petroleum Corporation. However, users do not get the BPC-produced LPG in the market.
Industry people said the market for LPG grew 18 percent in 2012. But growth could drop this year due to the government’s decision to resume natural gas connections to households.

Source: The Daily Star

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