War, rising import costs drive up BD’s LPG prices: LOAB

CHATTOGRAM, Nov 12: Geopolitical tensions in the Middle East, rising global LPG prices, higher shipping costs and Taka depreciation have pushed up import expenses, intensifying pressures on Bangladesh’s liquefied petroleum gas market. LPG Operators Association of Bangladesh (LOAB) has blamed external shocks and inadequate domestic infrastructure for the growing price volatility.

In a statement issued on Thursday, LOAB President Mohammad Amirul Haque said the country's heavy dependence on imported LPG had made the domestic market highly vulnerable to fluctuations in the global energy market and exchange rates.

Haque, who also serves as president of Chattogram Chamber of Commerce and Industry (CCCI), said nearly 80 per cent of the cost of a 12-kg LPG cylinder was linked to international procurement and import-related expenses.

According to LOAB, the average Saudi Aramco Contract Price (CP), a key international benchmark for LPG pricing in Bangladesh, rose by nearly 21 per cent to around $666 per tonne in 2026 from $552 per tonne in 2025.

The association attributed the increase largely to geopolitical tensions in the Middle East, which have disrupted international shipping routes, increased freight charges and created uncertainty in global supply chains.

It said commercial vessel movements through the strategically important Strait of Hormuz and Bab-el-Mandeb Strait had faced significant disruptions, while several conventional supply contracts had been cancelled or become uncertain.

The conflicts have also contributed to a global shortage of specialised LPG carriers, pushing up shipping costs and procurement premiums, the statement said.

Although Bangladesh had taken initiatives to import LPG from the United States before the escalation of the conflicts, helping maintain supplies during the global crisis, shipments from the US involve longer transportation routes than those from the Middle East.

The depreciation of Taka against the US dollar has further increased import costs. LOAB said the local currency had lost around 3 per cent of its value over the past year, adding to the financial pressure on importers.

Explaining the domestic pricing mechanism, the association said Saudi Aramco announces its monthly contract price at the end of each month, which the Bangladesh Energy Regulatory Commission (BERC) uses as a benchmark to determine retail LPG prices in the first week of the following month.

Haque also pointed out the difference in government support for the LPG sector between Bangladesh and neighbouring countries. 

While India allocated approximately $3.1 billion in direct budgetary subsidies for LPG in the 2025-26 fiscal year, Bangladesh provides no comparable government subsidy to keep LPG affordable for consumers, he said.