Recently, the prices of liquefied petroleum gas (LPG) have risen significantly in Bangladesh’s retail market. In some areas, LPG cylinders are being sold at prices higher than those set by the Bangladesh Energy Regulatory Commission (BERC).
In certain locations, consumers are even unable to obtain cylinders because supply is insufficient to meet demand. But what has caused the sudden surge in LPG cylinder prices?
Industry insiders say that several international and domestic factors are behind the current market situation. Rising LPG prices on the international market, geopolitical uncertainty in the Middle East, higher shipping costs, and complications related to transportation and supply have increased the cost of importing LPG into Bangladesh. These factors are contributing to the rise in domestic LPG prices.
Discussions with several companies that supply LPG to the market have revealed that a number of developments have contributed to rising demand for the fuel. One of the key factors is the decline in piped gas supplies.
Over the past few years, the volume of gas supplied through pipelines has fallen considerably, forcing many consumers to become increasingly dependent on LPG cylinders. This has put additional pressure on the market.
Furthermore, the suspension of imports and supplies by one or two companies that previously supplied LPG has intensified the pressure on the market.
Meanwhile, BERC sets the retail selling price of LPG cylinders. Companies say they sell their cylinders at the prices determined by BERC and that all relevant documents are available for official verification.
However, supply shortages in some areas have led retail traders to charge higher prices. As a result, the gap between wholesale and retail prices can exceed Tk 400 in some cases.
Some people have blamed the major companies for this situation, even though various government agencies are responsible for monitoring the retail market.
Speaking to The Ittefaq about the issue, Mathendra D. Jayosha, Chief Operating Officer of Omera LPG, said that Omera Petroleum had continued its regular import operations despite rising LPG prices on the international market, limitations on import financing, and growing pressure on domestic supply.
He said that while consumers expect a reliable supply of LPG at government-fixed prices, the companies involved must maintain supply continuity while dealing with various financial and operational challenges.
Jayosha explained that banking constraints and complications in securing import financing had prevented several major LPG operators in Bangladesh from maintaining their normal import operations. As a result, pressure on market supply had increased, creating a gap between demand and the availability of LPG.
He added that although various companies were facing challenges in procuring LPG, Omera’s financial capacity and operational preparedness had enabled it to continue importing the fuel regularly.
“The important point here is that although Omera’s own import operations have continued regularly, the overall supply situation in the market has placed additional pressure on the company’s existing supply capacity,” he said.
According to Jayosha, BERC set the price of a 12-kilogram LPG cylinder at Tk 1,837 in October. However, reports that some retail outlets are selling LPG at prices above the prescribed rate have raised concerns among consumers.
He said Omera remained committed to complying with government regulations on pricing and supported initiatives by the relevant authorities to prevent unauthorized price increases.
However, he stressed that maintaining market stability would require coordinated efforts by all stakeholders, including importers, banks and financial institutions, regulatory bodies, and distributors.
He added that improving LPG availability for consumers would require removing barriers to import financing, strengthening international supply chains, and ensuring fair prices in the domestic market.
When contacted, iGas, another LPG supplier in Bangladesh, said that many people were blaming companies for the increase in LPG cylinder prices. However, the company maintained that anyone could track its import records and sales data. It also keeps daily sales records, which are available for inspection by anyone interested.
Regarding the shortage of LPG cylinders in the market, iGas said that the conflict involving the United States and Iran had created instability in the international oil and gas markets.
According to the company, many ships were now heading toward the United States because of the crisis in the Middle East. As a result, Asian countries had to pay significantly higher premiums to secure fuel shipments.
On the issue of rising LPG prices, the company said that prices were determined by the government and that all companies were required to comply with the prescribed rates. It also emphasized that the situation did not depend on any single company, as several other suppliers operated in the market.
So, when will the situation return to normal?
In response to this question, iGas said it was difficult to predict when conditions would improve, as much would depend on developments in the Gulf region.
The company indicated that a quick recovery was unlikely because repairing the infrastructure damaged by the conflict would take time. Bringing ships back into regular service and restoring normal shipping operations would also be necessary.