Domestic LPG price hiked amid global fall

Bangladesh raises the retail rates of liquefied petroleum gas (LPG) for September although this fuel prices on the international market decreased, thus further inflating households' rising expenses.
Bangladesh Energy Regulatory Commission (BERC) Wednesday announced the hike in prices of the cooking gas provided by private operators by 1.31 per cent, while the September global prices fell around 2.98 per cent.
Depreciation of the local currency, taka, against the US dollar is the reason for raising domestic LPG prices, acting BERC Chairman Abu Faruq said while announcing virtually the new tariffs.
The price of 12kg cooking fuel is now Tk 1,235 for September trading compared to Tk 1,219 of August, he said.
The commission adjusted the LPG prices in proportion to the Saudi Aramco contract price (CP) of September 2022 as the benchmark for fixing LPG prices for the domestic market.
It also considered fluctuations in foreign currency and change in the value-added tax (VAT) amount to fix the month's LPG prices.
The Saudi Aramco CP price of propane is US$650 per tonne and butane $630 per tonne for September trading.
The BERC has considered propane-butane mixture at the ratio of 35:65 to get the average price at $637 per tonne.
During August, the Saudi Aramco CP price of propane was US$670 per tonne and butane $660 per tonne -- and considering the propane-butane mixture at the ratio of 35:65, the average price was $663.50 per tonne.
The BERC fixes the LPG prices for private operators within the first week of every month, in accordance with market-based pricing of the widely used fuel.
"The new prices will have immediate effect from September 7, 2022," said the BERC's acting chairman.
Private sector now can sell LPG through different sizes of cylinders like 5.5 kg, 12.5kg, 15kg, 16kg, 18kg, 20kg, 22kg, 25kg, 30kg, 35 kg, and 45kg to consumers at proportionately higher prices in September, he said.
Price for LPG to be supplied through reticulated system, or centralized storage system, will be Tk 99.65 per kg, inclusive of VAT, for September.
Retail price of auto gas -- the LPG used in vehicles -- for September also rises, to Tk 57.55 per litre including VAT.
The price of state-owned LP Gas's LPG has been kept unchanged at Tk 591 for 12.5 kg LPG.
Currently, 27 LPG operators are doing business although some 58 received licences to do the business. Some 20 operators import around 1.10 million tonnes of LPG from the international market, which is around 98 per cent of the country's total requirement of LPG, while seven are satellite operators.
There are some 20 LPG terminals across the country and the reserve capacity has around 100,000 tonnes in total.
Some 35 million LPG cylinders are being used in the LPG business in the country.
A total of 200 road tankers, 5,000 trucks and 21 cargoes are involved with the LPG business across the country.

Azizjst@yahoo.com