The price of liquefied petroleum gas (LPG) is not going to be reduced soon as the LPG price in the world market has shot up recently. Members of the LPG Operators Association of Bangladesh (LOAB) in its recent meeting on Sunday decided to maintain a status quo in the Bangladeshi market despite the price hike.
Citing reasons behind the status quo, a member of the LOAB—which comprises of the largest LNG importers of the country—told The Independent that an increase in the price of LPG would have created public dissatisfaction.
“We couldn’t take any decision of reducing price as under the present circumstances it is not possible,” he said referring the price in the international market.
The current international price used in the market is called the Saudi Aramco Contract Price (Saudi CP) and is expressed in $US per metric tonne.
The Saudi CP is set on the propane and butane commodity prices, and published on the first business day of the month and remains fixed for the remainder of that month.
Saudi Aramco has set its February CP for propane at$470/metric tonne (mt), up $40/mt from the January
CP, and its butane CP at $450/mt, up $30/mt from the Janaury CP.
As of April, a tonne of imported LPG cost $580 (about Tk 50,000), including freight charge of $110.
A tonne of gas yields 83 12-kg cylinders. So, the production price of a 12-kg cylinder stands at Tk 650 to 700. Companies sell the gas at Tk 995 to wholesalers, who then sell it at about Tk 1,100 to 1200 to consumers.
But on the other hand they have to give some Tk 200 subsidy for each gas cylinder.
Talking with The Independent, a member of the LOAB said that there was another major decision taken in the meeting.
The companies who have the capacity of less than 5,000 mt storage capacity would be considered as an associate member of LOAB.
Those companies will be able to buy imported LPG in bulk from the full members from now on, said a full member.