12kg LPG cylinder price hike recommended

Bangladesh Energy Regulatory Commission’s technical committee has recommended raising 12kg Liquefied petroleum gas cylinder price by Tk 65.

The committee made the recommendation at the LPG price adjustment hearing on Monday. It rejected all demands by LPG operators but accepted the suggestion to increase distributors and retailers commissions.

But the Consumers Association of Bangladesh (CAB) said there is no scope to legally accommodate the LPG operators’ appeal.

BERC Chairman Abdul Jalil presided over the hearing at BIAM foundation auditorium in Dhaka. Members of the commission, representatives of the operators, consumer rights, social organisations and politicians attended the hearing.

The regulator held the first round of LPG hearing on January 12 and fixed LPG price for the first time in April. Later, 18 LPG operators appealed for raising the 12kg cylinder price, claiming that the increase was insufficient.

In September, the 12kg LPG cylinder price was fixed at Tk 1,033 considering the Saudi Contract Price. But the operators are selling the LPG cylinders in the market at Tk 1,100.

The technical committee proposed a further hike based on the September price to Tk 1,097.76. It recommended keeping the LPG bottle and storage charges unchanged but suggested increasing the commissions of distributors and retailers.

CAB Energy Adviser Prof Dr M Shamsul Alam questioned the logic of raising the price as LPG cylinders are being sold at the price fixed by the operators.

The operators claimed that they were seeking a hike as they could not make profits at the current price.

Alam said that a case is pending in the court in this regard. “Consumers won’t benefit from this hearing if the issue of LPG price is settled in court,” he said.

He noted that the operators have to apply within 30 days against the commission’s order but they applied between May 29 and June 3. “There was no rational reason for accepting the application,” he said.

Operators say they will incur heavy losses if a ‘reasonable price’ of LPG is not fixed.

The traders said that around Tk 35,000 crore has been invested in this sector employing 1.3 million people. They disagreed with the commission’s charge on net profit, loan interest, sales and administrative expenses, lifespan of cylinders and sales volume. They demand to amend these charges.

BERC Chairman Jalil said the commission would come to a decision based on the hearing.