Smaller liquefied petroleum gas (LPG) cylinder producers are finding it difficult to comply with operating and licensing policy, industry insiders alleged.
The policy set a mandatory limit of storage capacity 5,000 tonnes for the LPG marketing companies, which is not possible for them to comply.
The industry people said the policy "unduly favours" a handful of large players, but is not friendly to the medium-sized firms.
Despite a stay order of the High Court on the writ petition filed by some affected companies, the authorities concerned have been issuing orders to comply with the regulations, they said.
A number of LPG cylinder producers have recently urged the Federation of Bangladesh Chambers of Commerce and Industry to address the issue.
Mahbubul Alam, president of the Chittagong Chamber of Commerce and Industry (CCCI), also sought intervention of Dr Towfiq-e-Elahi, energy adviser to the Prime Minister.
He requested the adviser to exclude the LPG plants, established before issuing the 'LPG operational and Licencing Policy, 2017,' from the mandatory storage limit.
Talking to the FE, adviser of the LPG operating company Bin Habib Bd Ltd, Mahfuzul Haque Shah said small and medium companies have been facing the problems of complying with the storage limit.
He said except for a few large companies, medium and small scale companies are facing problems with operating business.
The government awarded operating licences to 57 companies on a primary basis to import, bottle and market LPG, he said.
The government needs to frame separate policy for medium and small scale LPG companies to help them comply, he said.
Chairman of the SL Karnaphuly LP Gas Limited, in a letter to the CCCI, said a total of 16 LPG cylinder producing companies have been established in the country.
"Due to unhealthy competition, the LPG cylinder is available in the market at Tk 490-620 each," he said.
Investment of the majority of the LPG companies is at stake due to the lack of level-playing field, he added.
Md Shamim Chowdhury, managing director of the Padma LPG Limited, in a letter to the FBCCI, said the depth of river of Bangladesh does not allow LPG ships to anchor with capacities of over 3,000 tonnes.
Bangladesh Energy Regulatory Commission (BERC) member Maqbul-E-Elahi Chowdhury said this policy conflicts with the BERC law enacted in 2003.
Those who have pursued the policy are the most affected, he added.
BERC is the tariff fixation authority while this policy did not mention its name anywhere, he added.
LPG companies have also proposed to allow franchisees to operate business using the brand of operators.
They have called for handing over the licencing authority to the BERC and the Department of Explosives instead of several authorities, including the energy ministry and the Bangladesh Petroleum Corporation (BPC).
In the letter, the LPG cylinder producing companies also demanded reintroduction of tariff value instead of 5.0 per cent VAT on retail sales.
The CCCI said the payable tax jumped four to five times due to imposition of VAT.
The businesses also sought tax incentives as they have to import 99 per cent of the raw materials for producing cylinders.
A total of 27 LPG cylinder companies operating in the country have invested around Tk 150 billion.
The annual production capacity of LPG increased to 2.0 million tonnes against the domestic demand of 1.2 million tones.
Some 40 per cent capacities of local companies remain unutilised.
doulot_akter@yahoo.com