Home ›› 09 Feb 2023 ›› Front
Consumers continue to suffer due to the frequent increase in power and energy prices while traders’ non-compliance with the liquefied petroleum gas (LPG) prices set by the government is intensifying their hardship.
The Bangladesh Energy Regulatory Commission (BERC) fixed 12kg LPG cylinder prices at Tk 1,498 for February. However, such cylinders are being sold at Tk 1,750 in the market, creating further misery for consumers already burdened by high commodity prices and soaring inflation. This additional expenditure stands at around Tk 2,500 crore a month.
Even though LPG price irregularities have been going on for a long time, the government has not taken any steps in this regard. Consumer rights organisations have said they will take action but have not followed through. On the other hand, the BERC could not tackle the irregularities even after holding discussions with LPG operators. As a result, it is consumers who are ultimately suffering.
Though charging more than the prices set by the BERC are 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 their weaknesses.
Meanwhile, market monitoring teams of Directorate of National Consumer Right Protection (DNCRP) have found that 12 kg LPG is being sold at between Tk 1,600-Tk 1,800 in the market instead of Tk 1498, fixed by BERC.
“From LPG operating companies’ selling points to retailers’ selling points—everywhere the products are being sold at inflated prices”, said A.H.M. Shafiquzzaman, Director General (Additional Secretary) of the DNCRP while holding a meeting with LPG operators, dealers and retailers at the DNCRP headquarters in the city on Wednesday.
However an official of Meghna LPG Mahbub Alam said “We have to pay banks Tk 106 as dollar exchange rate against the previous rate of Tk 85.”
He also said the freight charge of shipping has gone up to$120 from $90 per tonne while costs of electricity and transportation have increased.
BERC secretary Khalilur Rahman said in the meeting LPG operators and dealers saying that the regulator has asked them for submitting valid documents of their cost escalation. “But none of the dealers and LPG operators submitted the valid documents. Rather they sought more time in this regard”, he added, without any valid documents, BERC cannot consider their claims of cost escalations.
CAB representative Kazi Abdul Hannan said both the BERC and the DNCRP substantially failed to protect the rights of the consumers.
LPG importers said the BERC is not an efficient body for fixing prices because its officials do not have a clear idea of the global market. “We will incur losses if we sell at BERC prices,” Azam J Chowdhury, president of the LPG Operators Association of Bangladesh, told The Business Post recently.
A BERC official said the commission has been fixing LPG prices because of 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 case of non-compliance.”
On February 2, the BERC hiked 12kg LPG cylinder prices by Tk 266, setting it at Tk 1,498 at the retail level for this month, due to a global increase in the prices of propane and butane according to the Saudi contract price. It also fixed all types of LPG cylinder prices at Tk 124.85 per kg.
Salma Sultana, a resident in the capital’s Mohammadpur, said she bought a 12kg LPG cylinder at Tk 1,400 last month, which rose to Tk 1,750 in February.
Ramzan Ali, a retail LPG trader in Hazaribagh, said he buys a 12kg cylinder for more than Tk 1,450 from dealers. “Then I have transportation costs, shop rent, and staff payments. If I do not sell at higher prices, I cannot make profits.”
Omar Farooq Faisal, leader of the LPG Distributors Association Bangladesh, said consumers 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 the BERC and the High Court orders by selling at higher prices, which is a punishable offence under the commission’s act.
Bangladesh has been facing an extreme energy crisis since the Russia-Ukraine war began in February last year. It is the result of a decrease in both domestic gas production and liquefied natural gas (LNG) imports, which has affected not only power plants but also industries and households.
Most of the areas in the capital where low-income people live, including Kamrangirchar, Dhaka Udyan, and Chand Udyan, get no gas supply all day. As a result, those living there are suffering extremely and have been forced to switch to LPG. However, high LPG prices have intensified their suffering.
After a consumer rights group filed a case in 2016, the High Court authorised the BERC to set 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.
