Consumers pay heftily for LPG

For more than five years now, the government has failed to arrest artificial price mark-up by private companies who deal in liquefied petroleum gas (LPG) used by consumers in the country. It defies understanding how the state-owned Bangladesh Petroleum Corporation (BPC) sells a cylinder at Tk. 700 while private companies sell the same at Tk. 1,450. Going by what has been reported in this newspaper, we understand that companies and not consumers are getting the benefit of the annual Tk. 75crore in government subsidies. The purpose of the subsidy was to make LPG more affordable at consumer level but the contrary is happening. Since there has been little by way of market monitoring, the real purpose of subsidy is defeated.
Then again, BPC only produces 20 per cent of the estimated 100,000 tonnes of LPG required annually. The fact remains that with government footing a subsidy bill to the tune of Tk. 500 per 12.5kg cylinder, the gap between the government rate and retail price is approximately Tk. 800. What is even more astonishing is that due to lax controls and oversight, it is alleged that the entire BPC production is bought up by private companies and sold at inflated prices. With BPC lacking necessary market clout and authorities failing to intervene against market malpractices, there is hardly any reason to continue with the subsidy on LPG in its present form. A better way to utilise subsidies would be to pay these directly to target consumers' bank accounts so that they can defray the higher costs of LPG they must pay for.