12-kg LPG cylinders sell up to 500 taka above BERC-fixed price

An acute shortage has gripped Bangladesh's bottled liquefied petroleum gas (LPG) market, with 12-kg cylinders selling for 300 to 500 taka above the government-fixed price as falling pipeline gas supplies, geopolitical tensions in the Middle East and soaring international freight costs squeeze the market.

On Sunday, 12-kg LPG cylinders were selling for 1,830 to 2,100 taka in different cities, despite the Bangladesh Energy Regulatory Commission (BERC) fixing the price at 1,585 taka on September 10.

Consumers are also facing severe supply shortages, with many retail outlets reporting that they have run out of stock.

Public sector LPG operator LP Gas Limited (LPGL) has kept the price of its 12.5-kg cylinder unchanged at 777 taka, but its market share remains small compared with private distributors.

Industry insiders attributed the shortage to a sharp decline in domestic pipeline gas supplies, forcing household, industrial and commercial consumers to switch to bottled LPG.

According to Petrobangla, national natural gas demand is around 4,000 million cubic feet per day (MMCFD), against current supply of about 2,600 MMCFD.

Petrobangla has domestic extraction capacity of 2,750 MMCFD and regasification capacity of 1,100 MMCFD from two floating LNG terminals in Moheshkhali. However, disruptions in the global LNG market have tripled procurement costs, further straining gas supplies.

BERC Member (Gas) Md Mizanur Rahman said private operators imported and supplied 126,000 tonnes of LPG this month, compared with 100,000 to 106,000 tonnes during the same period in previous years.

Despite the higher imports, the shortfall in pipeline gas has driven up demand for LPG beyond the capacity of existing distribution networks.

Global LPG prices and ocean freight rates have also risen sharply, adding to pressure on local suppliers.

For September, Saudi Aramco set its contract prices at $625 per tonne for propane and $660 per tonne for butane, up from $620 and $640 respectively in August. Local operators use a 35:65 propane-butane ratio to produce bottled LPG.

Capt. Mainul Ahsan Khan, deputy managing director of Smart Group of Industries, the parent company of BM Energy, said conflicts in the Middle East had restricted global LPG supplies, allowing wealthier countries to outbid local importers.

“BERC set the retail price based on a freight benchmark of $160 per tonne, but actual international freight charges have surged to $400 per tonne,” Khan said. “Private operators cannot absorb such heavy losses continuously without government subsidies. Most importers are running out of stock.”

Field visits to Bakalia, Chandgaon and Lalkhan Bazar in Chattogram found widespread shortages. Dealers said bottling plants had halted or sharply reduced deliveries over the past three days.

At retail outlets, 12-kg JMI cylinders were selling for around 1,850 taka, while Fresh and Jamuna cylinders were priced at 1,830 to 1,880 taka. Total and Omera cylinders were selling for 1,900 to 1,950 taka, while Beximco composite cylinders were priced as high as 2,100 taka.

BERC officials said they had held meetings with LPG producers and importers to stabilise distribution and restore regular supplies.