Chattogram:An acute crisis is affecting the bottled Liquefied Petroleum Gas (LPG) market in Bangladesh, with 12-kg cylinders being sold for Tk 300 to Tk 500 above the government-fixed rates. This situation has been exacerbated by shortages in pipeline gas, geopolitical tensions in the Middle East, and rising international freight costs that are straining supplies.
According to United News of Bangladesh, on Sunday, the 12-kg LPG cylinders were priced between Tk 1,830 and Tk 2,100 in various cities, despite the Bangladesh Energy Regulatory Commission (BERC) setting the price at Tk 1,585 on September 10. Many consumers face severe supply shortages, and some retail outlets are completely out of stock.
Public sector LPG operator LP Gas Limited (LPGL) has maintained its 12.5-kg cylinder price at Tk 777, but its market share is minimal compared to private distributors. The crisis is attributed to a significant decline in domestic pipeline gas supply, pushing household, industrial, and commercial consumers towards bottled LPG.
Petrobangla reports that national natural gas demand is around 4,000 million cubic feet per day (MMCFD), while the current supply is roughly 2,600 MMCFD. Despite having a domestic extraction capacity of 2,750 MMCFD and a regasification capacity of 1,100 MMCFD from two floating LNG terminals in Moheshkhali, disruptions in the global LNG market have tripled procurement costs, worsening gas availability.
BERC Member (Gas) Md. Mizanur Rahman stated that private operators imported and supplied 126,000 tonnes of LPG this month, an increase from 100,000 to 106,000 tonnes in previous years. However, the deficit in pipeline gas has led to an unprecedented demand surge that current LPG distribution networks cannot meet.
Amid the supply crunch, global LPG prices and ocean freight rates have risen sharply. In September, Saudi Aramco set contract prices at $625 per tonne for propane and $660 per tonne for butane, up from $620 and $640 in August, respectively. Local operators process bottled gas using a 3565 propane-butane ratio.
Capt. Mainul Ahsan Khan, Deputy Managing Director of Smart Group of Industries (parent company of BM Energy), noted that Middle East conflicts have limited global LPG availability, allowing wealthier nations to outbid local importers. He explained that BERC set the retail price based on a freight benchmark of $160 per tonne, but actual charges have surged to $400 per tonne, making it unsustainable for private operators without government subsidies.
Field visits in Chattogram's Bakalia, Chandgaon, and Lalkhan Bazar areas revealed widespread shortages, with dealers reporting halted or drastically reduced deliveries from bottling plants over the past three days. Retail shops were selling 12-kg cylinders of JMI at Tk 1,850, Fresh and Jamuna at Tk 1,830-1,880, Total and Omera at Tk 1,900-1,950, and Beximco composite cylinders at Tk 2,100.
BERC officials have confirmed holding meetings with LPG producers and importers to stabilize market distribution and restore regular supply channels.