BERC Holds Public Hearing Today at BIAM on LPG Traders' Demand for Higher Commissions

Although the government's regulator fixes prices regularly, the price of the essential product LPG has been effectively uncontrolled for about a year. Stakeholders cite commissions, transport costs and various other reasons for the higher prices. Against this backdrop, private LPG traders are set to sit at the discussion table with the regulator to press for higher profit commissions.

Importers have proposed raising their commission to the Bangladesh Energy Regulatory Commission (BERC) by two to two-and-a-half times, and distributors by three times. BERC has arranged a public hearing on these proposals today, Thursday, at the BIAM auditorium in the capital, from 10 a.m. to 4 p.m.

Instability appeared in the LPG market last November, when Dr Yunus's interim government was in office. Claiming imports were below demand, sellers began charging Tk 500 to 700 more per cylinder than the set price. People in many areas suffered without LP gas. The government then took various steps to favour traders, including reducing duties, raising import limits and easing LC opening. But for the last three months, disorder has again prevailed in LPG prices. Traders even had the price raised twice in one month in between. Yet consumers still did not get LPG at the set price.

This time, despite adequate imports, from last September the 12 kg cylinder began selling at Tk 2,500 — at least Tk 1,000 higher. In October the set price was raised by Tk 252 to Tk 1,837. But the government still could not control the market. As before, the 12 kg cylinder is selling at Tk 2,300 to Tk 2,500.

Applications submitted to BERC show that Omera has proposed raising the commission on a 12 kg cylinder from Tk 191 to Tk 478, Petromax to Tk 349, Delta to Tk 360 and Meghna Group to Tk 300. Distributors have applied to raise theirs from Tk 50 to Tk 150, and retailers from Tk 45 to Tk 70.

There are 30 registered companies in the LPG import business. Of them, six now import regularly. Another 12 organisations bottle gas collected from importers at their own plants. Bashundhara and Beximco, once market leaders, have kept their businesses closed in the changed political situation.

To pressure for their demands, the LPG Traders' Cooperative Association had called a strike on 15 and 16 October. The strike was withdrawn after the government's stern warning and the announcement of the public hearing date.

Monthly LPG demand in the country is 150,000 tonnes. In August and September, 156,000 and 157,000 tonnes of LPG were imported respectively. A similar amount is expected to be imported in October as well — meaning imports are running slightly above demand.

The system of announcing LPG prices monthly was first introduced in April 2021. At that time the commission on a 12 kg cylinder was set at Tk 143. Faced with demands from importers and operators, it was later raised to Tk 186 and then to Tk 191.

During the Awami League's last uninterrupted decade and a half in power, importers tried several times to raise commissions or profit rates, but did not succeed then. After the fall of Sheikh Hasina's rule in the July uprising and the arrival of a new government, they have become active on this front again.

Notably, while the government has set the retail price of a private 12.5 kg LPG cylinder at Tk 1,913 amid international price rises and other factors, the same product from the government's own company, LP Gas Limited, is priced at just Tk 776.93.