The Financial Express

Public hearing on LPG pricing today

| Updated: September 16, 2021 10:27:51

Public hearing on LPG pricing today

The public hearing to review the pricing formula to fix the retail price of LPG (liquefied petroleum gas) will be held today (Monday).

It will continue on Tuesday too if the hearing is not finished on Monday, said a senior official of the Bangladesh Energy Regulatory Commission (BERC).

The hearing was postponed twice before on the grounds of the countrywide lockdown to check the spread of deadly coronavirus and legal complexities.

The BERC has arranged the public hearing after receiving proposals from privately owned LPG operators to review the existing pricing formula, which was fixed after another public hearing in January following a court order.

The operators, which include LPG cylinder manufacturers, bottling plant owners, importers and traders, demanded an addition of Tk 224 for a 12-kg LPG cylinder as costs of the operators, while fixing new retail price of LPG by the BERC.

They alleged that the pricing formula as fixed by the BERC before did not reflect the proper cost and assumed 'improper' profit of private operators.

The LPG businesses, having the size worth around Tk 300 billion, are at stake as a consequence, they opined.

There were discrepancies while calculating costs in some five to six cost components of the operators, which include freight, return on equity, margin of distributors and retailers and in the pricing formula, for which the LPG operators were incurring losses, they alleged.

The price discrepancy has already aggrieved LPG distributors and retail sellers across the country.

The distributors and retail sellers have already suspended sporadically the LPG sales in the country's South West and North West region, said sources.

They also warned of the consequences if the BERC endorses further any 'arbitrary' pricing of the LPG, which they deem not 'suitable'.

The BERC has been fixing the retail prices of LPG over the past several months, under a pricing formula, which include cost components of the LPG operators, Saudi Aramco contract price, fluctuations of foreign currency, and a change in the value added tax (VAT) rate.

But most of the consumers were not getting it at the administered price, consumers alleged.

A 12kg LPG being provided by private operators is Tk 1,033 for September trading, as per the BERC's latest order.

But many consumers were buying the 12kg LPG cylinder at a higher price than the BERC fixed rate, they added.

Retail price of auto gas, the LPG used in vehicles, for September is Tk 50 per litre.

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