Consumers not getting benefit from LPG price cut

The Bangladesh Energy Regulatory Commission (BERC) has cut the retail prices of liquefied petroleum gas, known as LPG, twice in the last two months, but consumers are yet to get the benefits.

Traders were found selling the cooking gas at the previous prices.

Visiting several retail markets in the capital, a 12 kg to 12.5kg cylindered LPG was found selling at Tk 1,000 to Tk 1,050. As per the BERC set price, the gas cylinder is supposed to be sold at Tk 906, down from Tk 975 the BERC set in April this year.

Retailers said they buy 12kg cylinder gas from the wholesale market at of Tk 900 to Tk 950, which are almost unchanged prices.

President of LPG Operators Association of Bangladesh (LOAB) Azam J Chowdhury told the Business Insider Bangladesh, “Misinterpreting the cost factors, the BERC has set an arbitrary price. As a result, the operators cannot sell the LPG at BERC’s rate.”

“If the regulatory body doesn’t consider the factors, some Tk 32,000crore investment in the sector will be severely affected,” he added.

The association said it requested the regulator to consider at least Tk 481 as different level marketing profits and distribution costs for every 12 kg cylindered gas, but it estimated only Tk 194 for the pricing.

“It’s not true that LPG is selling in retail markets at higher prices than the BERC has set,” Mukbul E Elahi, member of the BERC (gas), said.

However, out of Dhaka, in all districts including Khulna, Rajshahi, Bogra 12kg cylinder is being sold at BERC’s set price, he added.

Mukbul said the BERC offered a subsidy to the LPG, but businesses and experts denied it in the hearing session.

All energy products and services are enjoying the government’s subsidy except LPG. LPG also can be sold at BERC’s price if it gets Tk 300 as a subsidy, he said.

The BERC claimed that the LOAB could not mention the cost factors while it was re-fixing the prices.

In the hearing, the BERC Technical Evaluation Committee suggested setting the price of each 12-kg LPG cylinder at Tk 954 as the highest and Tk 758 as the lowest for the private sector companies from the current price of Tk 1,259.

The commission adjusted the LPG prices considering the Saudi contract price (CP) of April 2021, fluctuations of foreign currency, and change in the value-added tax (VAT) amount.

The National Board of Revenue (NBR) in March 2021 reduced the VAT on LPG to 7 percent from the existing 15 percent to make its prices affordable for consumers.