LPG prices see a sudden surge on ‘demand-supply mismatch’

The retail price of a 12 kg cylinder has increased by at least Tk 200 last week and cylinders are unavailable at many retail outlets due to a dwindling supply

Consumers of liquefied petroleum gas or LPG, used for cooking and powering vehicles, have been hit with a sharp price rise overnight in Bangladesh amid a “supply crunch”.

The retail price of a 12 kg LPG cylinder has increased by at least Tk 200 last week and cylinders are unavailable at many retail outlets.

Many retail shops in several areas of Dhaka were out of LPG stock on Monday. Those who had them asked for Tk 1,600 for a cylinder, higher than the rate of Tk 1,232 fixed by the Bangladesh Energy Regulatory Commission for January.

The LPG Operators Association of Bangladesh, or LOAB, an organisation of LPG sellers, believes that prices are rising due to a supply crunch as its demand has increased, including in factories.

Golap Mia, a restaurateur in Dhaka's Pirerbagh, said the price of gas is increasing by a rate of Tk 100 to Tk 150 overnight.

He bought a 12kg cylinder full of LPG at Tk 1,450 on Saturday night. The supplier said that it would cost Tk 1,700 on Monday after charging him Tk 1,550 on Sunday night.

“Restaurant business cannot survive if LPG price continues to increase in this manner,” he said.

Green Hardware, a store in Agargaon, had many cylinders empty. A man at the store said the dealer who refills the cylinder ran out of gas.

"There is no gas today. We will be able to sell at night. But the price will probably be Tk 1,600 per 12 kg,” he said.

Saiful Islam, another retailer, said that he was also selling a 12 kg cylinder at Tk 1,600 — uncertain if the dealer would come with refilled cylinders at night.

Azam J Chowdhury, president of the LOAB, said the prices could be rising because of a shortage in supply against heightened demand.

Imports have been the same this month as they were in the last few months, but recently the use of LPG has increased in some industries, putting pressure on customers who buy the product for cooking.

Currently, 120,000 tonnes of LPG is being used in Bangladesh per month, according to the LOAB.

Azam also said the BERC-fixed rate does not reflect market reality, leading the price to fluctuate all the time.

BERC Chairman Abdul Jalil and member Maqbul-E-Elahi Chowdhury could not be reached over the phone for comment.

The regulatory agency will announce the new price of LPG for the month of February this week.