Reviewing the draft strategy paper on liquefied petroleum gas (LPG) usage, the government has disapproved of a proposal for giving subsidy to consumers when piped gas supply will stop, officials said.
If the government position stands, households will have to pay double for the bottled gas than the cost of piped natural gas, price differentials show.
The decision was taken at an inter-ministerial meeting last month, held at the Energy Division. Despite saying 'no' to the proposal for subsidy, the meeting, however, decided to encourage people for using LPG at increased level and discourage them from looking to piped gas, the sources said.
Contacted, director of Bangladesh Petroleum Corporation (BPC) Mosleh Uddin told the FE the move to provide subsidy to consumers would not see success until an appropriate distribution system could be developed.
"Otherwise, the subsidy money can be misused and ultimate consumers may not get it," he said.
Sources said the meeting discussed measures to be taken for reducing production cost of LPG. In that case the energy division has planned reduction or full waiver of taxes and duties at various stages.
Officials said a work plan has been prepared, based on the recommendation made in the LPG strategy paper, which suggests readjustment of natural gas price, discouraging new residential gas connection, and preparing plan on how to supply LPG in new residential areas.
The work plan also includes keeping consistency of LPG prices with that of natural gas, readjustment of local LPG price with global market, and the monitoring of import, bottling and distribution system of LPG by the BPC.
Steps will be taken to encourage private sector in distribution of LPG at consumer level, the work plan says.
In the first stage, the work plan says, the BPC itself will supply a significant amount of total demand for LPG to the customers through its companies. Compressed natural gas (CNG) stations will be converted to LPG stations in phases and the CNG-diesel-run state-owned busses will also be converted to LPG usage.
In the recent months high-ups of the government, on several occasions, said the present piped gas system would be phased out by LPG for household consumption.
Presently, some 2.8 million household consumers use 330mmcfd gas per year, which accounts for 13.06 per cent of production.
According to officials the prices of piped-gas and LPG have a significant gap which discourages households from opting for the liquefied gas. Presently, a two-burner oven costs a family Tk 650 per month for unlimited use, while a 12-kilogram LPG bottle costs them double at over Tk 1200.
    syful-islam@outlook.com
Govt won\'t provide subsidy to LPG users
Syful Islam | Published: April 07, 2016 00:00:00 | Updated: February 01, 2018 00:00:00
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