The Financial Express

LPG pricing by BPC faces opposition from energy regulator, rights groups

| Updated: September 27, 2021 15:47:59

LPG pricing by BPC faces opposition from energy regulator, rights groups

A government move allowing BPC monopoly on pricing its liquefied petroleum gas, bypassing scrutiny, came under a broadside from both the country's energy regulator and rights group.

Sources said the protesters demanded the withdrawal of the letter issued towards this direction by the Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR).

In the note, the division requested Bangladesh Energy Regulatory Commission (BERC) to keep the fixation of LPG price of the state-run LP Gas Ltd outside the BERC purview.

Officials said the EMRD had issued the letter recently following an appeal from the state-run Bangladesh Petroleum Corporation (BPC) to get back the authority to fix LPG price of its subsidiary LPG Gas Ltd on its own.

The BERC has set retail prices of LPG over the past several months under a pricing formula, following a court instruction.

"So fixing the LP Gas Ltd's LPG outside BERC purview might be a contempt of court," said a senior BERC official.

The Consumers Association of Bangladesh (CAB) also made a move over the matter of pricing of the much-needed fuel, imported to make up for natural-gas shortages. In a letter to the EMRD the rights lobby requested voiding or withdrawing its letter issued to the BERC "immediately".

It also requested the EMRD to bestow the authority of fixing the prices of petroleum products upon the energy regulator under the provision of article 22 (Kha) of the BERC law.

The CAB letter also demands distribution of the low-cost LPG of the LP Gas Ltd to slum-dwellers and street food vendors, in order to make life a bit easier for the hapless multitudes.

Sources, however, alleged that the consumers of LPG are not getting the cooking fuel at the price fixed by the energy regulator, exposing the bottlenecks in executing the commission's order.

The BERC has fixed the retail prices of LPG every month since April last following the court verdict.

A 12kg LPG cylinder provided by private operators cost Tk 1,033 in September trading, as per the BERC's latest order.

"But many consumers were buying the 12kg LPG cylinder at higher prices than the BERC-fixed rate," it has been alleged.

The fixed retail price of 12.5kg LPG being provided by state-run LP Gas Ltd is Tk 591, which the consumers never get, says the allegation.

The retail price of autogas -- the LPG used in running vehicles -- for September is Tk 50 per litre.

Sources said the BPC letter seeking to keep fixation of the LPG price of LP Gas Ltd outside the BERC purview was followed by a demand of privately owned LPG operators for a hike in the domestic LPG prices.

Private LPG Operators Association of Bangladesh (LOAB) alleged that the pricing formula as fixed by the BERC did not reflect the proper cost and assumed 'improper' profit of private operators.

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

Currently, 27 LPG operators are doing business although some 58 received licenses to carry out the business.

Some 20 operators import around 1.10 million tonnes of LPG from the international market, which is around 98 per cent of the country's total requirement of LPG, while seven are satellite operators.

There are 20 LPG terminals across the country and the reserve capacity has around 100,000 tonnes in total.

A total of 35 million LPG cylinders are being used in the LPG businesses in the country.

Some 200 road tankers, 5,000 trucks and 21 cargoes are involved with the LPG business across the country.

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