Home ›› 18 Aug 2022 ›› Front
Bangladesh Energy Regulatory Commission (BERC) has been fixing liquefied petroleum gas (LPG) prices every month since April 2019, but traders sell at higher prices, causing consumers intolerable suffering.
Consumers say LPG operators increase prices even if BERC reduces, describing it as anarchic.
The current high inflation and skyrocketing commodity prices have added to the woes of consumers, especially the low- and middle-income groups.
Consumers pay an additional Tk 200-300 on average to buy each LPG cylinder, which amounts to around Tk 2,500 crore a month.
Though not selling at BERC prices is a criminal offence under the commission’s act, the autonomous body is unable to take action in this regard, experts said.
They also said government bodies overseeing consumer rights cannot take strict action against offenders either due to weaknesses.
LPG importers, on the other hand, said BERC is not an efficient body for fixing LPG prices because its officials do not have a clear idea of the global LPG market.
“We will incur losses if LPG is sold at BERC prices,” Azam J Chowdhury, president of the LPG Operators Association of Bangladesh, told The Business Post.
BERC Chairman Abdul Jalil said the commission has been fixing LPG prices as per a High Court order and traders should comply with that.
“But we have no power to regulate the market and therefore cannot take action in this regard.”
The excuse of fuel price hike
On August 2, BERC reduced 12kg LPG cylinder prices by Tk 35, setting it at Tk 1,219 at the retail level for this month. It also fixed all types of LPG cylinder prices at Tk 101.62 per kg.
It said prices were reduced as Saudi Aramco had cut the prices of propane and butane, the main LPG components. But LPG retailers in the capital said they can never sell at BERC prices as they have to buy at higher prices from importers.
On August 15, this correspondent saw household consumers and small shopkeepers in different areas of the capital buying each 12kg cylinder at Tk 1,350-1,400 and each 35kg cylinder at Tk 3,900.
Prices are even higher outside Dhaka. In Dinajpur, each 12kg cylinder sells at up to Tk 1,500.
Traders said the recent unprecedented fuel price hike played a major role in causing LPG prices to go up. Besides, importers increased prices despite BERC’s reduction due to the devaluation of taka against the US dollar.
Wholesalers said importers increased per cylinder prices by Tk 50-70 on the pretext of the rise in transport fares after the fuel price hike.
However, the cost of transporting each cylinder from the Mongla port to Dhaka has increased by Tk 15, said LPG operators.
Ramzan Ali, a wholesale LPG seller in the capital’s Bosila, said LPG companies never comply with BERC prices.
“Rather, they increase prices, and we feel the pressure. Retailers do not want to buy at prices higher than what is set by BERC as consumers do not want to pay higher prices.”
Omar Farooq Faisal, leader of the LPG Distributors Association, said common people are not buying LPG due to high prices and are opting for electric burners instead.
Prof M Shamsul Alam, senior vice-president of the Consumers Association of Bangladesh, said LPG companies are defying BERC and the High Court order by selling at higher prices, which is a punishable offence under the commission’s act.
Low-income people bear the brunt
Amina Begum, 70, a resident of Lautala area in the capital’s Bosila, could not cook food and was starving on Monday as there was no gas supply in the house all day.
She is a domestic worker and cannot afford LPG. She often starves. Most of the people in Lautala belong to the low-income segment, and their condition is almost the same.
Bangladesh has been facing an extreme energy crisis since the Russia-Ukraine war began. Due to high prices, the government has stopped buying liquefied natural gas (LNG) from the spot market for the time being, which has affected households.
Most of the capital’s poor areas like Lautala get no gas supply all day. As a result, the low-income people are extremely suffering.
AHM Shafiquzzaman, director general of the Directorate of National Consumers Right Protection, told The Business Post they had continued drives against LPG price hikes across the country. “We will have a meeting with LPG operators on August 21 to discuss the matter.”
After a consumer rights group filed a case in 2016, the High Court gave BERC the authority to fix LPG prices in 2019.
The LPG Operators Association of Bangladesh says the annual demand for LPG is around 12 lakh tonnes, which may double by 2025.
Fifty-six private companies have licences to import LPG. 95-97 per cent of the LPG used in the country is imported.
