The retail price of liquefied petroleum gas (LPG) went up 10 per cent in the domestic market in January after demand rose in Western countries because of winter, pushing up the rate in the international markets.
The price of the fuel in the global markets reached $550 per tonne in December, an increase of 17 per cent from $470 in November. The hike caused the price to go up in Bangladesh from January 1.
Now, a 12kg LPG cylinder is being sold in the retail market at Tk 980 to Tk 1,050, depending on companies, up Tk 100 from ten days ago.
In December, a 12kg cylinder of Bashundhara LPG was sold at Tk 950, Beximco LPG at Tk 920, Jamuna LPG at Tk 940, Total LPG at Tk 950, and Petromax LPG Tk 930.
The increase came at a time when the Bangladesh Energy Regulatory Commission (BERC) is scheduled to hold a public hearing on the price of private LPG on January 14.
Shamsul Haque Ahmed, chief executive officer of Omera Petroleum, said the LPG price rose as the demand went up in Western countries due to the use of the fuel for heating purposes during winter.
"The effect of the price increase in international markets fell on local market as it is imported as a finished product."
"Private operators can't increase the price as per their wish," said Md Abu Bakr Siddique, chairman of the Bangladesh Petroleum Corporation.
"It is tough to rein in private operators to control the price of LPG," he added.
The price of a 12.5kg cylinder sold by state-run LP Gas has remained unchanged at Tk 600. The company brought down the rate to the current level in three phases during the coronavirus pandemic, considering the interest of consumers, Siddique said.
"We can't increase and decrease the price without any circular from the government. So, we have kept the price stable whether we make profit or not," said Fazlur Rahman, managing director of LP Gas.
LP Gas meets only 2 per cent of the 12 lakh tonne LPG consumption in Bangladesh every year.
The demand is increasing by 15 per cent annually and is expected to touch 30 lakh tonnes in 2030, according to industry insiders.
At the beginning of the pandemic, the price of LPG fell significantly in the international market. In April last year, it dipped to $250 per tonne.
Subsequently, importers had slashed the price.
The price went down to Tk 750 per 12kg cylinder in April to May.
But the price rose by Tk 300 per 12kg cylinder from May to January, in keeping with the rising rates in international markets.
In Bangladesh, the LPG price is revised on the first day of every month based on the average international rate of the benchmark fuel and the foreign exchange rate in the preceding month.
In Asia, it is usually linked to the price of crude oil.
"We increased the rate to adjust to the price in the international market," said Jakaria Jalal, general manager at Bashundhara LP Gas, the market leader with 24 per cent share.
Nayan Kanti Das, a retailer in Cox's Bazar, said the price increased at least by Tk 100.
Sugata Chakma, a user in Khagrachhari, said he bought a 12kg cylinder at Tk 750 in May. Last week, it was retailed at Tk 930. The price was Tk 1,200 a year ago.
Ghulam Rahman, chairman of the Consumers Association of Bangladesh, said the price hike was not logical as a case on fixing the price was pending with the High Court.
"We don't want to hamper the LPG business. Rather, we want a transparent and logical system that will ensure quality products and protect the interest of both consumers and businessmen," Rahman added.
The number of LPG users reached 20 million in Bangladesh last year.