Factories being forced to use LPG as fuel for lack of gas supply

Business enterprises have started using liquefied petroleum gas (LPG) in their industries as fuel for industrial output in absence of natural gas supply or due to low gas pressure, counting extra money and posing risks to major accidents, industry insiders feared.

Many industries are using LPG to run their gas-run boilers without converting those to comply with LPG, they said.

The industries are also not taking proper permission from the department of explosives to avoid any accident, it has been alleged.

The LPG-using industries are spending at least four times higher the costs of natural gas, the insiders said.

LPG use in industries is increasing in the port city of Chittagong where natural gas crisis is acute.

"Using LPG as fuel for industrial output is new in our country but not illegal. But it should be used after mitigating risk concerns," Petrobangla Chairman Hussain Monsur told the FE.

He said Petrobangla has no objection if the industrial units use LPG as fuel.

Sources said factory owners are buying LPG in bulk quantities from the LPG suppliers, especially from privately-owned ones, to ensure uninterrupted supply.

"We are selling bulk quantities of LPG on buyers' requests," Head of Marketing of France's Totalgaz Mozibur Rahman told the FE.

He claimed that his firm is supplying LPG to industry consumers after scrutinising whether they have permission from the authorities concerned to use it.

The Chittagong-based PHP Group is one of the leading industrial consumers of LPG, traders said.

One of the country's leading business groups is consuming around 30 tonnes of LPG per month, they said.

Several foreign firms including some Hong Kong-based apparel factories and many local textile firms are also using LPG in industries, said sources.

"We are being forced to use LPG in our factories to keep those operational spending more despite having safety concerns," the owner of an industry that uses LPG said.

"We have failed to get piped natural gas connections and increase gas pressure," he added.

Existing natural gas tariff for industry consumers is Tk 165.91 per Mcf (1,000 cubic feet), whereas the price of a 12.5 kilogram (kg) LPG is around Tk 1,500.

Before the start of using LPG in industries, many factories in the country began to use compressed natural gas (CNG) as fuel to run their boilers.

The practice of using CNG for industrial use began in early 2011 and the number factories using CNG would be over 1,200.

"Using CNG in factories is illegal," the Petrobangla chairman said.

Petrobangla has moved to stop such use of CNG to ensure public safety and security, he said.

The country's industrial sectors were increasingly converting their gas, diesel or furnace oil-fired boilers and generators to CNG-fired ones also due to a lack of access to piped natural gas.

CNG is legal only for use in vehicles in the country, Monsur said.

Factory owners were resorting to paying inflated prices to secure CNG canisters amid a nationwide shortage of natural gas as it is still proving cheaper than diesel and furnace oil.

They are ferrying cylinders from local CNG filling stations, ordering those in bulk from local markets and even importing the same to keep their factories functioning, industry insiders said.

The industries that are located far beyond top CNG filling stations are the main users of LPG, businessmen said.

The government should provide natural gas connections to the industries to ensure industrial growth and ensure the country's overall development, they demanded.