LPG prices up as suppliers out to punish bottlers

Local bottling plants are in dire straits after bulk suppliers have suspended supplies of liquefied petroleum gas (LPG) since November 12.
Prices of LPG cylinders for household use rose significantly in the local market.
A number of consumers said they have to pay around Tk 200 more for purchasing a 12 kilogramme cylinder each for household use.
There are 11 bottling plants in the country, mostly located in the Chittagong region.
The factories are facing difficult situation as they have invested a significant amount of money taking out bank loans while employing a good number of people, industry insiders said.
Businesses have raised the issue recently to the government high-ups.
Expressing concern over the issue, the Chittagong Chamber of Commerce and Industry (CCCI) on Tuesday sought immediate measures from the government high-ups to resume LPG supplies to the bottling plants.
Talking to the FE on Thursday, state minister for power, energy and mineral resources Nasrul Hamid said the price of LPG is controlled by the private sector.
"We have little to do on this issue as both bottling plants owners and bulk suppliers are in the private sector," he said.
Around 90 per cent of the LPG bottling plants are located in Chittagong.
The Chittagong chamber sent letters to the Prime Minister's Office, ministry of power, energy and mineral resources, Bangladesh Energy Regulatory Commission (BERC) and the Department of Explosives.
BERC director Rezanur Rahman said the commission has not received any letter yet.
He said they are not aware of the issue.
"I am not sure whether the bottling industry has any agreement with the bulk suppliers," he said.
In the letter, the CCCI president Mahbubul Alam said some 2.0 to 2.5 million units of LPG are usually produced and supplied from the Chittagong region every month.
"The use of LPG increased significantly as gas supplied for households has remained suspended for the last five years," he wrote.
The private sector imports and supplies around 98 per cent of the country's LPG demand.
Sudden suspension of LPG bottling will seriously affect the household consumers, he wrote.
He said the LPG bottling industry is also facing serious financial losses.
Bulk suppliers defend the action, saying supplies were stopped on compliance grounds.
Managing director of the BM Energy (BD) Limited Mostafizur Rahman, one of the suppliers, said the bulk suppliers have stopped supplying LPG to the bottling plants on the ground of compliance issues.
"We've raised concern over the irregularities and cylinders that the bottling plants are using. The bulk suppliers have also filed cases and complained to the government high-ups," he said.
He alleged the small plants are using substandard cylinders and sometimes sell bottled gases modifying cylinders of the bulk suppliers.
According to the LPG policy of the government, the suppliers of LPG gases must have own terminals and have to maintain other compliances, he said.
"It costs around Tk 2,500 per 12 kg cylinder for the bulk suppliers. But bottling plants are supplying at lower cost at Tk 800 to 1,200 by giving water or sand inside the cylinder," he said.
Former director of the CCCI Mahfuzul Hoque said the bottling industry is willing to sit with the bulk suppliers to know their compliance requirements.
He said the prices of LPG went beyond the purchase capacity of local consumers due to the suspension.
Currently, some eight to nine companies including Totalgaz, Basundhara LP Gas Limited, Beximco Petroleum Limited, and BM Energy are the bulk suppliers of LPG.

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