LPG retailers ignore BERC price

Retailers across the country continue to sell 12-kilogram Liquefied Petroleum Gas cylinders at a higher price than set by the authorities, barring general consumers from reaping the benefits of the price ceiling.

In its latest order, the Bangladesh Energy Regulatory Commission (BERC) fixed Tk 1,033 as the retail price for a 12-kilogram LPG cylinder. However, retailers continue to sell it to consumers from between Tk 1,100 to Tk 1,150

Talking to The Business Post, Mohammad Ripon, a resident of Dhaka’s Rampura area, expressed his frustration by saying that he pays a total of Tk 1,200 for a 12-kg LPG cylinder.

“It is really frustrating that the common people cannot buy LPG cylinders at the government-fixed price. When we ask traders why is the price higher, they claim that they themselves had to pay more to the distributors for the cylinders,” he said.

“On top of that, we have to pay an additional Tk 50 as delivery charge. I think the government should look into such irregularities,” he added.

Meanwhile, Mohammad Tareq, an LPG cylinder trader at the Rampura area, told The Business Post, “We have to pay Tk 1,090 to the distributor for each 12kg cylinder. There is an additional cost of Tk10 per cylinder for transportation and storage.”

“We take Tk 1,200 from the customer for each cylinder, which also includes the delivery cost from the shop to their homes,” he also clarified.

After closing doors for new gas connections in residential buildings due to an ongoing gas crisis, the government made several moves to make LPG affordable and popular as an alternative fuel for home cooking.

However, the rising costs of LPG remain a barrier to its popularity in the country.

The LPG price in different parts of the world, including Asia, depends on the price set by Saudi Aramco, the public petroleum and natural gas enterprise of Saudi Arabia. The company sets a global LGP price every month.

Lastly, on August 31, BERC re-fixed the price of 12 kg LPG cylinder at Tk 1,033 after evaluating the price announced by Saudi Aramco.

Before the order, the price of a 12 kg cylinder was fixed at Tk 993 at the private level, up from Tk 891 in July and Tk 842 in June.

According to the Energy and Mineral Resources Division, 28-29 LPG operators currently, including the state-owned LP Gas Limited (LPGL), import, stock and distributes LPG in the country.

BERC held a public hearing on September 13 where LPG operators raised various issues with the present price and proposed another hike to make their ends meet.

According to Aramco, it has been recommended to increase the supply cost of a 12 kg cylinder LPG Tk 1,097.76, as per Tk 91.48 per kg, for the month of September.

At the public hearing, Bashundhara LP Gas Ltd Head of Division (Sales) Engr Md Jakaria Jalal that the present commission rate for selling government LPG has been fixed at Tk 50 for the state operator and Tk 30 for retailers.

“However, the commission rate for private operators has been fixed at Tk 24 and Tk 27 for retailers,” he said, adding that such commission rate is too low for sustaining a business in this field.

Many LPG retailers also expressed concerns that it will become difficult for them to do business if the government does not fix a reasonable price for LPG cylinders.

They also informed that around Tk 35,000 crore has been invested in this sector and supports the livelihood of around 13 lakh workers.

Omera LPG’s Chief Executive Officer Shamsul Haque Ahmed told The Business Post that they have been incurring losses from LPG sales due to the price fixed by BERC.

There are various costs in multiples steps in bringing LPG cylinders from the gas importer to the consumer; he said adding that the prices are being fixed without considering the additional costs.

“It is possible to sell gas at the same price across the country if new prices are set considering all aspects. That is what we want,” he said.

Meanwhile, BERC Member Md Maqbul-E-Elahi Chowdhury told The Business Post that the shopkeepers often sell LPG after included the delivery cost to the customer’s home.

“However, if more than the fixed price is being charged, action will be taken if the commission received a complaint in writing form,” he said.

The Consumer Association of Bangladesh’s Energy Advisor Prof Dr M Samsul Alam told The Business Post that it is not possible for the BERC to comply with the law by asking traders to set prices.

“However, the consumer rights protection organization CAB will not accept if traders charge a higher price ignoring the order. They will take legal action.”

“This pricing problem can only be determined by the court,” he added.