LPG Operators Association of Bangladesh (LOAB) today attributed increased raw materials required for liquefied petroleum gas alongside the supply crunch of the LPG and currency depreciation to heightened price of the crucial energy source in the country.
LOAB issued a statement saying higher raw material costs in international market, supply chain disruptions caused by the Middle East conflict, transport vessel shortages, rising transportation costs and the depreciation of the Taka against the US Dollar triggered the LPG price hike.
It said purchase and shipment required 80 percent of the cost of a 12 kg cylinder while VAT and taxes, cylinder filling, local transportation, dealer and retailer commissions and profit margins required the rest of the amount.
LOAB secretary general Mohammad Ahsanul Jabbar signed the statement saying LPG price hike in international market kept little scope to control domestic prices.
A review of the Saudi Aramco Contract Price (CP) shows that the average rose from about US$552 per tonne in 2025 to about $666 per tonne in 2026, an increase of nearly 21 percent, which raises importers' costs before the gas even reaches the domestic market.
LOAB said the Middle East conflict as a primary reason for the increase, noting that it severely disrupted commercial shipping through the Hormuz and the Bab-el-Mandeb straits.
“Many supply contracts have been cancelled, and the fate of others appeared uncertain,” the statement read.
The association, however, said the government began importing LPG from the United States before the start of the conflict to secure energy supply and that process now appeared crucial for the LPG supply, bypassing the troubled straights.
According to LOAB Bangladesh currently meets 80 percent of LPG demand through imports from the US.
The association said weaker currency value of Taka against the US dollar became a major cause for the heightened LG price since the payments are made in the US currency increasing import costs.
LOAB said market systems, infrastructure, production capacity, and government financial support gave the neighbouring India an edge over Bangladesh retarding LPG prices.
The association said Bangladesh's limited port infrastructure, lack of domestic production and differences in government subsidies exposed the country to a disadvantageous position as well.
Indian seaports are deep enough for Very Large Gas Carriers (VLGCs) to dock directly at jetties and discharge 42,000 tonnes of LPG in three to four days.
Ports in Bangladesh, on the other hand, are too shallow, requiring lighter vessels to carry the petroleum from mother vessel in deep sea which takes about 25 days.
Since a large VLGC costs around US$200,000 a day to operate, this process alone adds roughly $4 million over 20 days, and these extra costs are ultimately passed on to consumers.
LOAB expects prices to fall somewhat if a land terminal is built at Maheshkhali, either by the government or as a joint venture.
Energy and Mineral Resources Division (EMRD), meanwhile, issued strict directives on enforcing the fixed LPG prices, while Bangladesh Energy Regulatory Commission (BERC) issued a stern warning against selling LPG above the mandated prices.
LOAB also instructed all its operators and distributors to sell LPG at BERC-set prices and to ensure uninterrupted supply to uphold consumer interests.
