US Dominates 85% of Bangladesh’s Total LPG Demand

❐ Staff Reporter

According to the Bangladesh Energy Regulatory Commission (BERC), the country imported about 1.743 million tons of LPG in the fiscal year 2025-26. About 99 percent of the country’s market is controlled by private operators. Their market share was almost the same in the previous fiscal year.

The war situation in the Middle East has led to a major change in the source of Bangladesh’s liquefied petroleum gas (LPG) imports. A year ago, Bangladesh was mainly dependent on Gulf countries for imports. At that time, more than 41 percent of the total LPG came from Oman.

Iraq, Saudi Arabia and the United Arab Emirates were also significant sources of imports. But the situation changed after the war spread in the Middle East. The United States, instead of the Gulf countries, is now the main source of LPG for Bangladesh. About 85 percent of the total imports came from the country as of September this year.

According to BERC data, Malaysia accounted for 3 percent of total LPG imports outside the United States as of September this year. About 7 percent came from the Democratic Republic of Congo and the Republic of Congo in Africa.

In other words, having moved away from traditional Middle Eastern sources, Bangladesh is now largely dependent on the distant United States for LPG.

However, Oman was the largest source of LPG imports in the country until September 2025. At that time, more than 41 percent of total imports came from the country. The United States accounted for 27.4 percent; Iraq for 21 percent; Malaysia for 5 percent; Saudi Arabia for 4 percent and the United Arab Emirates for 2 percent.

This major shift in import sources within a year has also raised questions about new geopolitical risks to the country’s energy supply system.

BERC data shows that about 1.743 million tons of LPG were imported into the country in the 2025-26 fiscal year. About 99 percent of the country’s market is in the hands of private operators, which was almost the same as in the previous fiscal year.

In this import-dependent market, if the international supply system is disrupted or if import costs increase, it will directly affect the domestic market. In the 2024-25 fiscal year, the dependence on the private sector for imports remained at almost the same level.

BERC officials said that despite the increase in LPG imports from distant countries, it has not yet had an impact on the domestic market price. However, they are reviewing whether the increase in transportation costs and time could have an impact on LPG prices in the long term.

In this regard, BERC Chairman Jalal Ahmed said, “The source country of LPG imports has changed. This change has been happening for a few months. Earlier, 41 percent of LPG was imported from the Gulf country Oman. However, no LPG has come from that country for a year. Due to imports from distant countries, the issue of ship rental and transportation time has come to the fore. We are taking these issues into consideration.”

LPG prices in Bangladesh are primarily determined based on Saudi Aramco’s announced contract price or Saudi CP. The company announces separate prices for propane and butane every month. BERC determines the LPG price by taking the prices of these two components into account, including import and transportation costs, and other costs until the product reaches the consumer.

The escalation of the US-Israeli military conflict over Iran in late February this year has created instability in the Middle East’s energy supply. Security risks in the Strait of Hormuz, disruptions to shipping, and rising insurance and transportation costs have prompted importers to look for alternative sources. As it has become difficult to procure LPG from the Middle East, Bangladeshi traders have increased their imports from the US.

The distance to transport LPG from the US is much longer than from the Middle East. According to traders, this has resulted in increasing shipping costs, transportation time, insurance and other logistics costs, which are also affecting the domestic market. Many also believe that the dependence of a large part of imports on a single country is creating risks in the supply chain.

Abu Saeed Raja, Chief Marketing Officer (CMO) of Fresh LP Gas, said, “Due to the war, there have been major changes in the market and supply system of energy products. The source of LPG imports for Bangladesh has also changed. Currently, 85 percent of LPG is coming from the United States. There is nothing objectionable about this. However, two major problems have arisen.

“First, it takes 45-50 days for LPG to arrive from the US, whereas it used to take a maximum of 15 days from the Middle East. Due to the long transportation time, traders are holding up their money after opening letters of credit. Second, over-reliance on one country increases supply risk. If one ship is stranded for any reason, it can affect the entire supply chain.”

The impact of the war has also affected Bangladesh, creating a global fuel supply crisis. Although the fuel oil crisis has eased to a great extent, instability still remains in the LPG market. Although there has been no major change in the volume of imports, the problems with supply and prices have not gone away.

Especially in September and October, there were allegations that 12-kg LPG cylinders were being sold at a price of 400 to 600 taka higher than the fixed price in various parts of the country. In some places, consumers did not receive the cylinders despite paying the additional price.

According to the National Board of Revenue (NBR), 157,760 tons of LPG were imported into the country in August this year. In the first 22 days of September, 118,742 tons were imported. According to BERC estimates, the demand for LPG in the country is about 142,000 to 150,000 tons per month. Although there was no major shortage in the import and demand statistics, there was a crisis in the retail market.

According to industry insiders, rising international prices, rising shipping and import costs, as well as weak supply management at the importer, distributor and retailer levels, have exacerbated the crisis. There are also allegations that some operators have reduced supply to the market in anticipation of price adjustments due to higher import costs.

Meanwhile, on November 2, BERC fixed the price of a 12-kg LPG cylinder at Tk 2,060 for the month of November. The price in the previous month was Tk 1,837. As a result, the price per cylinder increased by Tk 223 in one month. The impact of the increase in Saudi Aramco’s contract price or Saudi CP and import costs is reflected in this price adjustment.

Private operators supply about 98 percent of LPG in the country’s market. The import and supply work is also mainly in their hands; BERC only announces the price. Private operators claim that they do not see any crisis in the import cost or supply of the product due to the cessation of LPG imports from Middle Eastern and Gulf sources.

They say that LPG prices are similar in different markets around the world; mainly due to changes in ship fares. They believe that there is no harm in bringing LPG regularly from the United States. According to them, it is important for the situation to stabilize.

LPG Operators Association of Bangladesh (LOAB) President Mohammad Amirul Haque said, “Previously, a large portion of LPG that was imported from the Middle East is now coming from the United States. There is no problem in changing the source.”

“What matters is how long it takes for the goods to reach the country. If there was adequate infrastructure, this would not have been a problem either. The previous government could not build the necessary infrastructure, nor did it give the private sector the opportunity. As a result, we also have to deal with the impact of changes in the global supply system. However, there is not much difference in the price of LPG in the world market depending on the source.”

According to energy experts, import dependence and over-reliance on the private sector are major weaknesses in the country’s LPG market. Government supply is very low against the annual demand of about 1.7 to 1.8 million tons.

As a result, if the operations of a major importer are disrupted, there is a risk of crisis in the market. To reduce this risk, it is necessary to increase the source of imports, enter into long-term supply contracts and build adequate storage capacity. According to traders, transportation costs can be reduced if terminals and storage facilities suitable for unloading LPG from large ships are built. Currently, the cost per ton is higher due to imports in small ships.