Consumers have to pay higher prices of Liquefied Petroleum Gas (LPG) because of non-compliance by sellers with the price fixed by the regulator. Since last April, the Bangladesh Energy Regulatory Commission (BERC) started fixing LPG prices, which however were below the rates offered by the sellers. Consumers are paying more to get LPG cylinders as importers, dealers, and retailers have not been complying with the BERC rates. The commission has failed to implement its price in the market.
For a 12kg cylinder, retailers are charging Tk 1,050-1,100, which is around 23 per cent higher than the price set by the BERC. On June 30, the commission set Tk 891 as the retail price of a 12kg LPG cylinder for the month of July to ensure a win-win situation for both consumers and sellers, as the demand for the fuel has been growing over the last decade. Currently, LPG use stands at over 12 lakh tonnes a year, up from 47,000 tonnes in 2009. At the moment, more than four lakh consumers use LPG sold in the market. Until recently, consumers bought import-based LPG at prices determined by market players.
The LPG cylinders marketed by the private bottlers could be less expensive for the consumers for whom the government offers subsidy as in neighbouring India. LPG marketers in India fix the price of their cylinders every month taking into account the international prices of the item and the exchange rate of the Indian Rupee. Consumers are required to buy the fuel at market prices. The subsidy amount, which covers a part of the market price of LPG, goes to the bank accounts of the consumers directly.
Fixation and enforcement of LPG price should be rational as the retailers buy cylinders at prices that are higher than the set selling price. We think the government should enact sector-specific laws and rules keeping in view the present as well as future developments and interests of all stakeholders. The authorities should employ a task force comprising experts in the relevant field to prepare a set of policy guidelines to ensure balanced development of the growing LPG sector.
