BERC moves to fix retail price of LPG

The Bangladesh Energy Regulatory Commission (BERC) has taken up an initiative to fix the retail price of liquefied petroleum gas (LPG) through a pricing policy like natural gas and electricity as per High Court order.
LPG consumption in the country has witnessed a whopping four-fold growth in 2016 and 2020 with households, commercial entities, and vehicles increasingly relying on the fuel, as there is no LPG price monitoring system or existence of energy pricing policy to discuss the issue.
"The government recently amended the law that empowered it (BERC) to review the prices of gas and electricity whenever it wishes," Energy Secretary Md Anisur Rahman said. BERC fixes natural gas price and the law made it obligatory for it to set the price after holding public hearing but it never fixed LPG price, the price is being fixed up by the market players.
In 2016, the High Court has ordered the BERC to submit a report within one month     about the measures it has taken to fix the price of bottled LPG (examining the volatile market of LPG and consumers suffering that time), the High Court asked the authorities concerned why it will not term illegal the inaction about the pricing. But the rule remained unanswered ever since.
However, the Energy secretary said a committee has been formed comprising with the members of BERC, Energy Ministry, they are working, according to him the committee will submit its report within a couple of weeks.
As per directives of the Energy Ministry, the BERC has started the work in this regard and trying to fix up a modality to determine the LPG price in domestic market, sources said.
 "We are witnessing that an anarchy is prevails in the LPG market,' said Consumers Association of Bangladesh energy adviser professor Shamsul Alam.
"An average family generally uses two LPG bottles (12.5 kg each) cost TK 1,600-2,000. But, those who use kerosene or firewood spend as much or more. On the other hand, a consumer enjoys piped gas supply from utility companies paying only Tk 975 only per month (for unlimited use) for domestic consumption, it is injustice," he said.
Bangladesh's LPG market is import-dominated, as more than 60 per cent of LPG cylinders and 95 per cent of total LPG requirement are met through import, about 26 LPG companies are now dominating the unlimited market those are supplies over 1.0 million tonnes of LPG each year in the country at present. BPC has a very insignificant market here, they are producing only 20,000 tonnes of LPG that cannot make any impact on the market price.
At present, approximately 2 million domestic consumers use natural gas mainly for household cooking. The gas utility companies estimate that approximately 7 per cent of the total population of the country gets the privilege of getting piped gas supply for everyday cooking. The rest 93 per cent are using either costlier bottled LPG gas, or kerosene or firewood.
It also showed that Bangladesh annually consumes about 10 lakh tonnes of LPG and about 98 per cent of it sold in bottles by two dozen private companies and only two per cent is sold by the government.
BPC said that a private company spends about Tk 800 to supply 12 kg of LPG in cylinder to the customer including the import and the transportation cost as well as the value added tax.
Energy division data showed that around one million tonnes of LPG was consumed by the end of 2018, up from around 250,000 tonnes in 2015.
The volume of LPG consumption was around 400,000 and 650,000 tonnes in 2016 and 2017, respectively, according to stakeholders and market players.