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Retail prices of liquefied petroleum gas, or LPG, shot up by 20 per cent this week, the highest level in years.
Each cylinder weighing 12 kilogramme was selling at Tk 1,200, up by Tk 200.
Privately-owned LPG importers and marketers increased the price as energy prices surged in the global market in the wake of killing of top Iranian general Qassem Soleimani in Iraq on Friday, a senior official of an LPG firm told the FE on Sunday.
He feared that the LPG price in the domestic market would spiral further with the uptrend in oil, gas and other energy prices in the international market.
Indian LPG companies, however, raised only Rs19 per 14.2 kg LPG cylinder to Tk 714 from Rs 695 this week, Indian media reported.
An LPG trader involved in foreign trade of the product in Bangladesh said the prices of LPG components propane jumped by US$125 per tonne to $565 and butane by $135 per tonne to $590 recently in the international market, he said asking not to be named. LPG is the mixture of propane and butane.
"We have been selling each cylinder LPG from Tk 1,000 to Tk 1,050 over the past three years," said retailer Rafiqul Islam.
But the price increased abruptly to Tk 1,200 per cylinder from Saturday, he said.
State-owned LP Gas Ltd., a subsidiary of the Bangladesh Petroleum Corporation, however, is selling a 12 kg LPG cylinder at its previously fixed rate at Tk 700, said a senior corporation official.
Market insiders said LPG consumption in the country has seen a four-fold jump over the past three years riding on its increased use in households, commercial entities and vehicles.
Currently over 1.0 million tonnes of LPG are consumed annually, which was around 250,000 tonnes in 2015.
Bangladesh consumed around 650,000 tonnes of LPG in 2017, up from around 400,000 tonnes in 2016, market players said.
Favourable government policy, duty waiver on the import of LPG and its machinery and crackdown on illegal gas connections have helped boom in LPG use across the country.
A government strategy to popularise LPG consumption across the country instead of piped natural gas to cope with the fast-depleting natural gas reserves has also supported the consumption growth.
A senior official of energy and mineral resources division under the ministry of power, energy and mineral resources said Bangladesh's actual demand for LPG would be around 2.0 million tonnes, double the current consumption, where consumers are still using kerosene and wood as alternatives to LPG due to the lack of availability.
Riding on the booming LPG consumption in Bangladesh, the number of such companies has increased rapidly.
Currently, some two dozens of LPG operators are actively involved in trading in the country, which was just six in 2015.
Some 60 firms have obtained licences from the ministry to run LPG business, said the energy ministry official.
Bangladesh's LPG market is import-dominated as more than 60 per cent of cylinders and 95 per cent of the country's total requirement are met with imports, he added.