The squeeze in the LPG market is landing straight on consumers. According to BERC and importers, Bangladesh imported about 160,000 tonnes of LPG in August but only about 120,000 tonnes in September, a fall of some 40,000 tonnes, or about 25 per cent, in a month.

On 2 September the Bangladesh Energy Regulatory Commission cut the price of a 12kg cylinder by Tk 13 to Tk 1,585. In the market, consumers are paying Tk 2,000 to 2,100 for one.

Importers blame disruption on the main shipping routes, such as the Red Sea and the Strait of Hormuz, caused by the war situation in the Middle East, which has created a shortage of ships and pushed up freight; the Middle East is also Bangladesh's main source of LPG. Abu Sayeed Reza, chief marketing officer of Meghna Fresh LPG, said the biggest problem is getting cargoes at all, and that many global suppliers have cut deliveries by 20 per cent despite long-term contracts.

Members of the LPG Operators Association of Bangladesh (LOAB) say the cargo premium has risen from the $160 a tonne BERC allows to $260-400, which cannot be recovered at the set price, so many are limiting imports. Tanzim Chowdhury, chief executive of Omera Petroleum, said his company imported about 30,000 tonnes in September.

Bangladesh uses 1.5 to 1.6 million tonnes of LPG a year, 80 per cent of it for household cooking, and the private sector supplies about 99 per cent. BERC chairman Jalal Ahmed said the September shortfall arose because some companies' ships did not arrive on time and he would meet importers soon; unless the shipping problems ease, he warned, the shortage could continue into October.

Photo: Evil Monkey / Wikimedia Commons (CC BY 2.5)

Source: Nagorik TV