Regulators fix LPG prices | The Daily Star
12:00 AM, April 13, 2021 / LAST MODIFIED: 12:32 AM, April 13, 2021

Regulators fix LPG prices

12.5kg cylinder of state-owned company to cost Tk 591 while pvt companies to charge Tk 975

Bangladesh Energy Regulatory Commission, for the first time, fixed the retail prices of liquefied petroleum gas yesterday amid disappointment of consumers.

According to the new rate, the retail prices of a 12.5kg LPG cylinder sold by the state-owned Liquid Petroleum Gas Limited (LPGL) will cost Tk 591, while a 12kg LPG cylinder of private companies will cost Tk 975.

The new rate came into effect yesterday, BERC Chairman Abdul Jalil said while announcing the prices via a virtual press conference.

The price of a 12.5kg LPG cylinder sold by the state-owned company was Tk 600. However, this gas could meet only 2 percent of the 12 lakh tonne of LPG consumed in Bangladesh every year.

Currently, a 12kg LPG cylinder is being sold in the retail market between Tk 980 and Tk 1,000, depending on companies, Tk 100 up from December.

In December last year, a 12kg LPG cylinder of Bashundhara was sold at Tk 950, Beximco at Tk 920, Jamuna Tk 940, Total Tk 950 and Petromax Tk 930.

Addressing the virtual press conference, the BERC chairman said they have set the prices based on the price rate set by Saudi Aramco, a Saudi Arabian oil company, in March, and the recommendation made by the stakeholders in a public hearing on January 14.

With the announcement of the new price, the decision to fix or re-fix the retail price of LPG has gone to a single regulatory authority for the first time in the country. Before that, state-owned and private companies used to fix their prices separately, causing indiscipline in setting the LPG price.

"We welcome the legal process that has initiated pricing. And it is the outcome of our efforts. That's why we're a little relieved," Prof Shamsul Alam, energy adviser of Consumers Association of Bangladesh (CAB).

Prof Alam, however, said the decision did not protect consumer interests. "The issues that were given importance in the public hearing were not reflected here. Instead of protecting the consumers' interests, there are examples of protecting the interests of traders."

At the public hearing on January 14, a reasonable price of LPG was set at Tk 840 and the BERC's technical committee recommended the price to be fixed at Tk 866, Prof Alam said.

But the BERC has now set the price on the basis of the international market rate in March. If the price was fixed in January as per the recommendation of the public hearing, the price of LPG gas would have been Tk 866, he said. "So it proves that the BERC strategically gave traders this advantage."

"This shows that BERC has failed to protect the interests of consumers. On the other hand, it could not ensure neutrality in determining the LPG gas price," Prof Alam claimed.

Although the price of LPG cylinder fixed by BERC  is lower than the current price, it is still beyond the purchasing capacity of general consumers, said Al Amin Khan, of Ruhily village in Jamalpur's Melandah upazila.

Al Amin, a schoolteacher of Melandah, also urged the government to revise the price, considering the purchase capacity of general people.

Meanwhile, Engineer Jakaria Jalal, head of sales at Bashundhara LP Gas Ltd, said, "We have no option to comply with the decision as it is a decision of the state. But this price is not realistic and not sustainable. We will write to the BERC to reconsider the pricing."

Before setting the price of LPG by BERC yesterday, Bangladesh Petroleum Corporation had been fixing the price of LPG produced by state-owned company, while the private companies fixed their prices on their own.

Speaking at yesterday's press conference, the BERC chairman said they would revise the price every month based on the price of international market.

According to the BERC Act, 2000, electricity tariffs and prices of downstream petroleum products should be fixed by the energy regulator through public hearings.

On November 29 last year, the High Court issued a contempt of court rule against the BERC chairman for not complying with its directive over fixing the price of liquefied petroleum gas.

The HC bench issued the rule during hearing a petition filed by Consumers Association of Bangladesh (CAB).

On December 15, the BERC chairman offered an unconditional apology to the HC for not complying with its directive over fixing the LPG price.


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