As per international market, per 12 kg LPG bottle price should be Tk 660 instead of Tk 1,200
Shah Alam Nur: Country’s liquefied petroleum gas (LPG) consumers are reportedly paying around double amount from the fixed rate mainly for lack of proper monitoring of the authorities concerned.
Consumers claimed absence of government initiative is one of the major reasons behind facing such situation.
They said now LPG price is skyrocketing due to shortage of natural gas in the country, as a result, the consumers are forcing to purchase LPG at a higher price from the prescribed rate of the government.
Consumers claimed that the suffering of the LPG users are increasing and the current price went beyond their purchasing capability.
The government has not taken initiative to solve the kitchen’s fuel problem, even though the LPG has been stopped provide causes of short supply, they also claimed.
According to LPG Operators Association of Bangladesh (LOAB), there are around 20 million people started to use LPG instead of other sources of energy in recent years which pushing the annual demand 1.5 million tones.
The LOAB data also showed the price of one tone of LPG is $ 690 in the international market. In this calculation, per kg price is $0.69 dollars. Compare with international market per 12 kg LPG bottle price should be Tk 660. However, these 12 kg LPG bottles are selling at Tk 1,200 in the country market.
An official, in a private company told the Daily Industry on the condition of anonymity that that a 12 kg LPG cylinder production cost is Tk 845 and they are selling at Tk 945 to the whole seller. But, in retail level, the consumers are paying above Tk 250 to Tk 300 for on per bottle from the whole sale price which is unjustified.
Another official said a LPG company has to calculated gas price, premium, ship rent, unloading, carrying cost to factories, gas cylinder transport cost to dealer then the manufacturers could make profit which is very difficult.
Liquefied Petroleum Gas is typically referred to by its acronym – LPG. LPG is mixture of flammable hydrocarbon gases that include propane, butane, isobutene and mixtures of the three LPG gases. LPG is commonly used for home heating, cooking, hot water, and auto gas fuel for LPG cars and vehicles.
LPG gas comes from oil and gas wells, as it is a fossil fuel. LPG gas manufacturing process includes natural gas processing and the crude oil refinery process.
LPG, liquefied through pressurization, comes from natural gas processing and oil refining. In different countries, the LPG heating fuel gases supplied can be propane, butane or propane-butane blends.
Currently, more than 95 per cent of the LPG demand is met through import from various countries such as Singapore, Malaysia, Saudi Arabia, Abu Dhabi and Kuwait. A good number of private companies in the country are involved to supply LPG in local market.
In order to promote the use of LPG, the government is providing favorable policies and incentives. There is tax exemption for import of LPG, and the previously imposed 15 per cent duty on the import of LPG cylinders, said industry insiders.
A number of players are already operating in the market with Bashundhara, Omera and BM securing top position. However, 23 new companies have applied for license and six new companies are scheduled to enter the market in 2019.
As product differentiation is low, new companies are providing cost cuts to capture and penetrate new markets whereas old players are trying to align with them to protect their positions.
Due to high capital intensive nature of the industry, only companies with a long-term vision and deep pockets will be able to survive in the long run.
According to Global Petrol prices, the average price of LPG around the world is 0.59 U.S. Dollar per liter. However, there is substantial difference in these prices among countries.
However, consumers have underscored the need for undertaking necessary steps to reduce the price of LPG for their sustainability.