LPG selling Tk 500–600 above fixed price, government warns of action, says information adviser

Liquefied petroleum gas (LPG) is being sold at Tk 500 to 600 above the government-fixed price. Dr Zahed Ur Rahman, the prime minister's adviser on information and broadcasting, said the situation has arisen partly because of a supply shortage. He said the government must take action if LPG is sold above the reasonable price set by the government, and that steps on the matter are essential to ensure people's welfare.

He said this on Tuesday (10 November) while answering journalists' questions at a press conference on the progress of various government activities.

At the press conference, a journalist asked that even though the LPG price had been raised amid the fuel crisis, cylinders were not available in the market at the government-fixed price. In some places, Tk 500 to 600 extra was being charged. At the same time, the price of rice had also risen. The journalist asked whether such price rises in daily essentials reflected weakness in the government's market monitoring.

In reply, Zahed Ur Rahman said LPG was being sold in some places at prices higher than what the government considers reasonable. There were also some problems with supply. But he said he was not citing the supply crisis to evade responsibility.

Explaining the government's case for raising the LPG price, the adviser said the government could keep prices low by paying subsidies, but its capacity to pay subsidies was nearly exhausted. In this situation, keeping prices low through subsidies could harm people in the long term.

He said, 'I had said that even if the price of gas rises, there is long-term benefit. Those who understand the basics of economics will understand that, for the government, the amount of subsidy for reducing this price is almost finished.'

Zahed Ur Rahman said the subsidies the government used to pay in various sectors had come down, and it was not possible to control prices in every sector through subsidies. But reducing subsidies was one thing, and products being sold above the government-fixed price was another. In that case, the government needed to take steps.

On the effectiveness of market monitoring, he said when fears of a price rise for a product emerge, that affects supply and price-setting. The government was trying to monitor the market situation, but in a market economy, monitoring alone did not always produce effective results.

On the rise in rice prices, the adviser said an effective way for the government to control the market was to increase the supply of products. For this, an initiative had been taken to double rice storage capacity, and work on it had already begun.

He said that by ensuring adequate stocks, the supply of rice in the market would be increased when needed. Intervening in the market by increasing supply was more effective than controlling the market by sending police, and the government was trying to implement that initiative.

Zahed Ur Rahman said that if consumers still had to buy LPG at a higher price despite the reasonable price fixed by the government, the government would have to take the matter into consideration. The government had a responsibility in this regard to ensure people's welfare.