Private companies in Bangladesh are once again increasing prices of bottled liquefied natural gas as its price on the global market rebounds from record lows.
The companies moved to increase their prices per cylinder by up to Tk 70 though they did not reduce the price when the coronavirus crisis halved the price of LPG on the global market in April.
The move to increase the bottled LPG prices by private companies comes about three months after the state-owned LPG bottling and marketing company, LP Gas Limited, reduced its price by more than 15 per cent in late July.
Currently, the government sells a kilogram of LPG for Tk 48 while the private companies charge between Tk 63 to Tk 71 for the same amount of gas.
The current price of per kilogram of LPG on the global market is about Tk 32.
‘Private companies already have a high profit margin and there could not have been any reason behind them increasing their prices again,’ said LP Gas managing director Fazlur Rahman Khan.
Omera LPG, a leading private LPG marketing company, increased its price by Tk 40 per refill of 12-kg bottle in two phases this month.
The company is charging Tk 850 to refill a 12-kg bottle and an additional Tk 700 for the cylinder.
Omera LPG chief executive officer Shamsul Haque admitted that there was a recent price hike and said that there was a possibility that LPG would become even costlier before the end of the month.
‘There is a forecast of an increase by $50 in prices of LPG next month,’ said Shamsul Haque.
In October, per tonne LPG sold at $378.5 on the global market, far less than $582.5, which was the price in January, before the coronavirus crisis had impacted the market.
The LPG price dipped record lows in April with per tonne sold at $237. The coronavirus crisis emerged in Bangladesh in March.
Shamsul Haque admitted that they did not reduce the price of LPG following its decline in the global market.
‘All private LPG companies are incurring loss because of its low price. Ours is the lowest LPG price in the region,’ Shamsul contended.
Jamuna LPG managing director Belayet Hossain claimed that they reduced their price in the wake of the crisis but failed to recall exactly how much did they reduce.
‘I cannot comment on what is going to happen in future. It will depend on the international market,’ said Belayet.
But consumers and LPG bottle wholesalers and retailers have clearly remembered that they did not witnessed any fall in the price of LPG since March immediately after the onset of COVID-19.
Mushfiqur Rahman, a Khulna-based LPG cylinder dealer, said that all companies have asked them to prepare for a price hike in a day or two.
‘Some of them have told us to expect up to Tk 70 increase per bottle of 12-kg LPG,’ said Mushfiq.
Mehedi Hasan, a resident of Tangail, said that LPG businessmen never liked to see their consumers get a confortable situation and always put them under pressure.
‘Who could have thought that the LPG businessmen would take advantage of the worst crisis in centuries,’ he said.
In January, two months before the emergence of the coronavirus crisis, the private LPG businesses increased the price of each bottle of LPG by Tk 150 to Tk 200, depending on their size, after the price of per tonne of LPG increased on the international market by $129.
In November last year, the price of a bottle of LPG was increased by Tk 120, saying that the petroleum prices had increased in the international market by $10 per tonne.
Bangladesh annually consumes a million tonnes of LPG, 98 per cent of it supplied by private companies. The majority of the private LPG consumers are household users.
Only two per cent of government share in LPG market is too little a stake to create an impact on the private LPG businesses whose investment is around Tk 15,000 crore.
The call for regulating private LPG businesses has been around for a long time but it still remained unheeded.
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