Local LPG price still higher despite fall in int\\\'l market

The international price of liquefied petroleum gas (LPG) has taken a downturn but its impact on the domestic market is unlikely to be felt anytime soon, business executives said.
State-run Saudi Aramco has cut its August contract price for propane to $780 a tonne, down by $40 from the July level. Butane prices for August 2014 were also cut to $800 a tonne from the July level of $840, according to www.endofcrudeoil.com disclosure.
The executives said Bangladesh market is expected to get the benefits of price fall by the middle of this month.
The prices provide a benchmark against which Middle East sales of the liquefied petroleum gas to Asia are priced.
Regarding the downtrend on the international market, Petredec Elpiji Ltd General Manager Md Saidul Islam said, "The price of LPG decreases in the summer as its demand falls while both the demand and price increases in winter."
"So, as a part of it, the international market price of LPG has been showing downtrend for the last couple of months. And as per August contract price of butane and propane cut by $ 40 and $ 40 per tonne respectively its impact might be felt by the middle of this month as the shipments reach Chittagong port at that time," he said.
Plant-gate prices of 12kg LPG cylinder of Kleenheat or Petragaz is now Tk 1,350, Bashundhara Gas Tk 1,400, Total Gaz Tk 1,330 and Jamuna Gas Tk 1,282.
The gap between prices at the LPG plant gate and the retail level is Tk100 to Tk150 per cylinder. The difference is due to transport cost and profit of the distributor and the retailer.
Bashundhara LP Gas Ltd and Sunderban Industrial Complex general manager Md Jahidul Islam said: "The propane and butane with previous (July)-adjusted price reached seaport last month and we are now purchasing.
"Our next shipment will reach the seaport by August 20 and after that we will revise the LPG price for the local market after measuring the carrying cost and international LPG price," Mr Islam said.
LPG is a combination of butane and propane with 70:30 proportions. The annual consumption of LPG in Bangladesh is around 100,000 tonnes. Some 80 per cent of the demand is imported while Bangladesh Petroleum Corporation (BPC) produces the rest 20 per cent.
The LPG is mainly imported from Malaysia, Indonesia, Vietnam, Singapore and China.