LPG importers seek duty waiver

Jubair Hasan | Published: April 18, 2011 00:00:00 | Updated: February 01, 2018 00:00:00

Jubair Hasan
Importers of liquefied petroleum gas (LPG) have demanded duty waiver on the import of relevant raw materials and capital machinery with a view to making available the fuel at an affordable price. They said the higher duty structure makes LPG expensive to consumers. The demand for LPG has gone up due to the government decision not to provide gas connections to households, they said. The importers said the government should waive the duty on import of raw materials and capital machinery of LPG, which is now subject to duty & tax ranging from 11 per cent to 33 per cent, in the upcoming budget for 2011-12 fiscal. The duty includes five per cent customs duty, 15 per cent value added tax, three per cent advance income tax (AIT) and one per cent pre-shipment inspection (PSI) charge for importing LPG cylinders. "We received many orders in recent times and the orders are gradually increasing," a senior official of Bashundhara LP Gas Limited said, adding that the private firms could not alone make the price of the alternative fuel affordable. "The price will definitely come down by a significant margin if the government waives duty on it," said the official of Bashundhara LP gas Ltd. A number of private firms are now engaged in marketing of LPG in Bangladesh. The firms include Totalgaz, Bashundhara, Kleenheat and Jamuna Spacetech. Currently the country consumes around 100,000 tonnes of LPG every year. The consumers are mostly the urban people in district towns and light engineering workshops. The private firms meet 80 per cent of the market need while the state-owned LPG producer supplies 20 per cent. Totalgaz charges Tk 1145 per cylinder, each having 12 kg, Bashundhara Tk 1155, Kleenheat Tk 1160 and Jamuna Tk 1131 at the distributor level. Kleenheat General Manager Md Saidul Islam told the FE that the demand for LPG had increased over the last 18 months following inability of the government to provide piped gas connections to domestic users. Mentioning high duty structure as one of the main obstacles of the sector, he said the government should immediately take measures to diversify the use of LPG as many other countries did so to lessen pressure on natural gas. "It should be treated as the most preferred alternative fuel," Mr Islam said, adding that Bangladesh Energy Regulatory Commission had asked the private companies to pay Tk 1.50 million as licence fee. "Now it is the time to promote the private firms to overcome the crisis", he said. Kleenheat supplied 15,000 tonnes of LPG last year. A senior official of energy ministry said they have urged the National Board of Revenue (NBR) to reduce the duty on LPG in a bid to encourage the consumption of the fuel.