Consumers deserve to know what they are paying and why

Bangladesh’s liquefied petroleum gas (LPG) market has come under scrutiny over the affordability of cooking fuel, the transparency of price determination and allegations of overcharging at the retail level. Questions have also been raised about import costs, shipping charges, market competition and the role of the Bangladesh Energy Regulatory Commission (BERC) in protecting consumers. In an interview with The Daily Observer, CAB energy expert Professor Shamsul Alam discusses the regulatory framework governing LPG prices, alleged irregularities in price determination, the role of importers and distributors, and possible policy measures to make the market more competitive. He also calls for greater transparency in cost calculations and stronger enforcement of consumer protection measures. The following interview was taken by Shahnaj Begum, Incharge of Power and Energy page

DO: LPG is an essential cooking fuel for millions of households in Bangladesh. There are concerns that its price is exceptionally high compared with neighbouring countries. Why do Bangladeshi consumers have to pay so much?
Alam: We must examine the entire pricing structure, including the international benchmark price, freight charges, insurance, port costs, taxes, distribution expenses and the margins of different market participants.However, consumers have every right to know how the price is calculated. Each component of the pricing formula should be transparent and supported by verifiable data. If any cost is excessive or unjustified, the regulator should investigate it.

DO: What, in your view, is the principal problem with LPG price determination in Bangladesh?
Alam: One of the central concerns is whether the pricing process is sufficiently transparent and whether the costs submitted by companies are being properly scrutinised.BERC has a statutory responsibility to regulate the energy sector under the applicable legal framework. The commission should ensure that price decisions are based on reliable information rather than accepting cost claims without adequate examination. Public hearing ensure the people’s right to understand why prices change, which cost components have increased and how those changes affect the final retail price.

DO: You have also mentioned a High Court directive issued in 2021. What is its significance?
Alam: The relevant court order needs to be examined in full to establish its exact scope and applicability. My position is that regulatory decisions must comply with binding judicial directions as well as the commission's governing legislation.
If a price-setting process violates a binding court order or a statutory requirement, the matter should be addressed through the appropriate legal and administrative procedures. Consumers should not be left without an effective mechanism to challenge decisions that affect their household expenses.

DO: You have also mentioned a High Court directive issued in 2021. What is its significance?
Alam: The relevant court order needs to be examined in full to establish its exact scope and applicability. My position is that regulatory decisions must comply with binding judicial directions as well as the commission's governing legislation. If a price-setting process violates a binding court order or a statutory requirement, the matter should be addressed through the appropriate legal and administrative procedures. Consumers should not be left without an effective mechanism to challenge decisions that affect their household expenses.

DO: Some market participants argue that rising international prices and shipping costs make higher domestic prices unavoidable. How would you respond?
Alam: International prices and freight costs certainly influence the cost of imported LPG. It would be incorrect to dismiss those factors altogether. But an increase in international costs does not mean that every price increase in the domestic market is automatically justified. The regulator must examine the actual purchase price, freight charges, exchange-rate effects, port expenses and other relevant costs. 

DO: In the interview, you cited import figures of approximately 158,000 metric tonnes in August and 157,000 metric tonnes in September. What do these figures tell us about the market?
Alam: If the figures are accurate and refer to comparable reporting periods, they suggest that substantial quantities of LPG entered the country during those months. Such figures are relevant when assessing claims of supply shortages. However, import volumes alone cannot establish whether the market had sufficient supply at every location or whether there was any artificial shortage.

DO: You have raised concerns about a possible syndicate involving importers, distributors and retailers. What evidence would be necessary to establish such practices?
Alam: I have expressed concerns about the influence of organised market interests and the role of the LPG Operators Association of Bangladesh, commonly known as LOAB. These concerns should be investigated by the relevant authorities rather than treated as established findings without evidence. The objective should be to ensure fair competition, prevent abuse of market power and protect consumers from unjustified costs.

DO: What should BERC do if a company is found to be violating pricing rules or engaging in misconduct?
Alam: The commission should enforce the law consistently. Where violations are established, it should take proportionate action under the relevant statutory provisions, which may include penalties, licence-cancellation measures or other remedies, depending on the nature of the offence. Sections 26 and 27 of the BERC Act have been raised in discussions about regulatory action. 

DO: You have also criticised the government's revenue collection from the energy sector. How does that relate to LPG prices?
Alam: In the discussion, I referred to figures indicating that the government collected approximately Tk 71,000 crore in revenue from the liquid-fuel sector over five years, along with around Tk 11,500 crore in surplus income and more than Tk 5,000 crore in dividends. Those figures need to be checked against official financial statements, and the relevant institutions, periods and categories must be clearly identified to avoid double counting. 
Revenue and dividends may be legitimate components of public finance, but policy decisions should be assessed in the context of the overall cost of energy, the quality of regulation and the needs of households.

DO: What role could the government play in improving LPG supply and reducing the burden on consumers?
Alam: The government could examine options for increasing its participation in LPG importation, storage and distribution where commercially and economically justified. Greater public-sector participation might provide an additional source of supply and help improve resilience. The government should also review whether existing policy decisions create unnecessary barriers to competition. Any directive or arrangement that grants exclusive advantages to particular market participants should be assessed under competition law and the relevant regulatory framework.

DO: What specific measures would you recommend to make LPG pricing more transparent?
Alam: I would recommend several measures. First, BERC should publish a clear breakdown of the price of LPG cylinders, including the international benchmark, freight, insurance, port charges, taxes and other relevant costs. Second, the methodology used to calculate freight expenses should be transparent and based on appropriate international benchmarks. Where possible, procurement and transportation arrangements should allow fair competition. Third, the commission should comply with applicable legal requirements for public hearings and disclose the evidence supporting its pricing decisions. Fourth, the authorities should conduct regular retail-market inspections and investigate complaints about prices above the official rate.Fifth, market concentration and possible anti-competitive practices should be examined by the competent authorities, with action taken where violations are proven. Finally, import, inventory and supply data should be made publicly available so that consumers, researchers and journalists can assess the market more accurately.

DO: How can ordinary consumers help address overcharging?
Alam: Consumers should check the officially announced price before purchasing LPG and request receipts wherever possible. They can document the price, location, date and cylinder size when reporting suspected overcharging.
Consumer organisations and journalists can help by collecting information from different neighbourhoods and comparing retail prices with official rates. However, responsibility should not be shifted entirely to consumers. Effective enforcement requires coordinated action by the regulator, consumer protection authorities, market-monitoring agencies and law enforcement where appropriate.

DO: Finally, what is your message to the government and the LPG regulator?
Alam: The government and the regulator must ensure that prices reflect legitimate costs, that businesses operate under fair competitive conditions and that consumers are protected against unlawful overcharging. The goal should be a pricing system that is transparent, legally sound and accountable to the public. As the Consumers deserve to know not only what they are paying, but also why they are paying it.