Syndicate hikes LPG price in the capital abnormally

Serajul Islam Siraj, Special Correspondent,, Dhaka
Photo: Collected

Photo: Collected

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Although Kolkata and Dhaka are buyers in the same market but there is a huge difference in the selling price of LP gas. In Kolkata, gas is sold for less than Taka 50 per kg, but in Dhaka it is being sold at Taka 75.

LPG cylinders weighing 15.6 kg are sold at Rupees 640 (Bangladeshi Taka 48) on September 6 in Kolkata. But in Bangladesh, 12 kg cylinders are being sold at Taka 900 to Taka 1000 which stands above Taka 75 per kg.

However, both the countries are importing most of the LPG from Qatar. The same waterway is also being used for transportation. Considering the distance, the distance between Mongla and Kolkata is almost the same, but it is being sold in Dhaka at a much higher price than in Kolkata.

One of the reasons for this, is the syndicate of LPG traders in Bangladesh. Traders are setting prices as they please. The government has no power to determine the price of this fast-growing product. But the hope is that the government has taken the initiative to break this syndicate of traders even though it is late. The work of fixing the retail sale price has started due to a directive of the High Court.

Last March, the ministry sent an opinion to the Bangladesh Energy Regulatory Commission (BERC). A two-week period is set for a report on the process by which the retail price will be determined. But though the process was stopped due to corona, BERC has recently taken initiative in this regard.

News of a special hearing is coming on September 18. BERC wants to get the views of consumers and people from different walks of life. According to sources in the Division of Energy and Mineral Resources, Bangladeshi traders are demanding 100 to 140 dollar per ton as transportation cost. They are importing two and a half to three and a half thousand tons together by lighter age ships. This is increasing the cost of transportation. If LPG could be brought in large tankers of 15 to 20,000 tons, the transportation cost could be reduced to 60 dollar per ton.

Like the traders, there is no profit in bringing such a huge amount of LPG together. On the one hand, they do not have storage capacity; there is no demand in the market. So there is no way but to bring in lighter age. It would have been easier if the traders could unite here. One risk is that if a company fails to open an LC in time, others will fall into crisis. That is why no one is stepping on this path.

There may be another solution, it would be better if someone could buy it alone. Others may buy him with some profit. Traders and consumers could also benefit from it. However, due to the foresight of some of the traders, there are no signs of being exposed in this way.

There are allegations that money is being laundered from Bangladesh. One of its means is over invoicing for imports. A few days ago, a well-known company was accused of importing oil. They import furnace oil at much higher prices than government companies at the same time. Many are skeptical that even in the case of LPG, it would not be a surprise if a company over-invoices.

In the fiscal year 2008-09, 44,984 metric tons of liquefied petroleum gas (LPG) was used in the country. In a span of 9 years, this demand has exceeded 7 lakh 13 thousand metric tons. The Energy Division thinks that the demand for LPG will exceed 80 lakh tons in 2041.

Joint Secretary, Energy Division Muhammad Sher Ali told, ‘The use of LPG has increased tremendously in the last 10 years. The highest rate (92 percent) has increased in the 2015-16 financial year.

LPG consumption has increased by an average of 35 percent. 56 companies have been approved. Of these, 16 companies are in production. If the companies that have been approved come into production, there will be no more crisis until 2041.'

In response to a question Muhammad Sher Ali said, ‘We are trying to come up with a pricing formula. There the price may be fixed keeping in view the import price, transportation cost, marketing cost and margin of importer and retailer. The views of all parties will be taken before finalizing.

Energy expert Professor Shamsul Alam told that traders are syndicating and raising prices at will in the name of profit. The ministry is giving them a chance to earn benefit. It is the fundamental rights of the consumer to receive goods at a fair price, recognized by law, is also enshrined in the United Nations Charter. But the basic rights of the people are being violated here. BERC is supposed to fix the price of petroleum products but the energy division is protecting them by talking about the modality.

State Minister for Power, Energy and Mineral Resources Nasrul Hamid told that they are working to expand clean fuel LPG. Due to various steps taken by the government, its spread is increasing rapidly. We have formed a committee; they are working on the price. Hopefully the pricing formula will be finalized soon.