LP gas prices not reduced despite duty reduction

Staff Correspondent

The government wanted to bring relief in the price of LP gas by reducing import duty. But consumers are not getting the benefits of that initiative. LP gas cylinders are still being sold in the market at a price higher than the fixed price. There are allegations that up to 30 taka extra is being charged per kg.

According to government estimates, there is a daily demand for about 5,000 tons of LP gas in the country. Accordingly, about 150 million taka is being collected every day by selling it at an excessive price in the market.

In December last year, when the country faced a shortage of LP gas, prices increased. To deal with the situation, the government reduced import duty and fixed the maximum retail price of a 12-kg cylinder. In January, its price was set at Tk 1,350. However, the cylinder was sold in the market at a price several hundred taka higher. In many places, gas was not available even at the higher price. In some places, a 12-kg cylinder was sold for up to Tk 2,500.

Although the price has decreased slightly in the past, it is still much higher than the fixed price. In February, a 12-kg cylinder was sold for about 1,700 taka. In March, it dropped to about 1,600 taka. However, the government’s fixed retail price is 1,341 taka.

On Tuesday, a visit to various areas of the capital showed that most shops were selling 12-kg cylinders for Tk 1,600. Retailers claim that they are unable to sell them at a lower price because they are buying at a higher price.

A retailer in the capital’s Banasree area said, “Gas is not available from the plant at the price set by the government. A 12-kg cylinder has to be bought for Tk 1,350 to Tk 1,500. The price also varies from company to company. Accordingly, it has to be sold at the retail level.”

Leaders of the LPG Distributors Association say that cylinders are sold at almost fixed prices at the plant level. With this, various costs including transportation, waiting charges and others are added, increasing the price at the marginal level. According to them, if the price at the plant level was lower, it would have been easier to sell at the fixed price at the retail level.

On the other hand, the LP gas importers’ association claims that there is no supply crisis. About 145,000 tons of LP gas were imported into the country in February, which is enough to meet demand.

The monthly demand for LP gas in the country is usually between 120,000 tons and 150,000 tons. This demand is increasing at a rate of 5 to 7 percent every year.

Officials of the Department of Consumer Rights Protection say that evidence of irregularities has been found in the market. In many cases, there are allegations that products are being sold at higher prices even though official invoices show one price. This is further increasing prices at the dealer and distributor level.

Officials of the Bangladesh Energy Regulatory Commission say that importers are now selling gas at relatively fixed prices. However, there are allegations of irregularities at the dealer and distributor levels. The Department of Consumer Rights Protection is responsible for taking action in these cases.