The private sector-dominated liquefied petroleum gas (LPG) market is set for renewed disruption just months after January's price chaos, as most distributors and retailers are allegedly defying government-fixed rates for windfall profits.
Industry insiders say many dealers are not selling LPG at rates set by the Bangladesh Energy Regulatory Commission (BERC), triggering concerns of another market "jumble" following the January "mess."
Distributors claim they are not receiving LPG from importers at the government-approved prices, while importers have dismissed the allegations as "totally wrong" and "baseless."
Amid the standoff, rights groups warn that a powerful syndicate involving importers, distributors and retailers is again active, seeking to create an "anarchy-like" situation similar to that seen in the run-up to the national elections several months ago to generate hefty profits.
Following the December-January volatility, BERC increased profit margins for both distributors and retailers.
The National Board of Revenue (NBR) also restructured the tax regime --scrapping 7.5 per cent value-added tax (VAT) at production and trading stages and 2 per cent advance tax on imports, while imposing 7.5 per cent VAT at the import stage to ease supply.
In addition, the government raised import and storage limits for LPG importers to facilitate availability of the fuel, widely used for cooking and in vehicles.
Despite these measures, importers, distributors and retailers have joined hands again to fish in dirty water amid global energy volatility and the persistent Middle East crisis, said Prof Shamsul Alam, energy adviser to the Consumers Association of Bangladesh (CAB).
Market sources said LPG cylinders were widely available across the country before the April 2 price hike, when BERC raised the price of a 12kg cylinder by 28.85 per cent or Tk 387 to Tk 1,728 from Tk 1,341 in March.
However, immediately after the hike, some dealers and retailers allegedly restricted their sales to maximise profits, they alleged.
When asked for comment, LP Gas Bebosayee Samittee President Selim Khan claimed that LPG operators were not supplying LPG at the official rate of Tk 1,633 per 12kg cylinder, as per BERC's order.
He alleged that cylinders are being sold between Tk 1,700 and Tk 1,940, though he could not provide invoices to support the claim.
Humayun Rashid, vice-president of the LPG Owners Association, said Bangladesh currently has ample LPG supply and the fuel is available in the domestic market.
"We imported around 180,000 tonnes of LPG in March," he told The Financial Express on Sunday.
He also insisted that operators are selling the fuel at government-fixed prices to ensure market stability.
Azizjst@yahoo.com
