LPG Already Selling Tk 500–700 Above the Official Price as Fresh Price-Hike Proposals Pile Up at the Energy Regulator

For more than a month, 12kg liquefied petroleum gas (LPG) cylinders have been selling for Tk 500 to Tk 700 above the government-set price. Amid this market instability, proposals to raise prices and operating costs at various levels have piled up at the regulator, the Bangladesh Energy Regulatory Commission (BERC).

Private importing and bottling companies have proposed higher operating costs at several levels, while distributors and retailers have also submitted proposals to the commission for higher commissions. Even the state-owned LP Gas Limited has proposed raising the set price of its 12.5kg cylinder from Tk 825 to Tk 1,235.42. BERC is set to hold a public hearing on these proposals on 29 October.

Bangladesh uses between 130,000 and 150,000 tonnes of LPG a month. State-owned LP Gas Limited sells only 1.3 percent of that; the rest of the demand is met by 10 to 12 private companies that import the gas.

Private LPG prices are reset every month, but the state company's price has stayed fixed for more than a year. Government LPG currently costs Tk 62.15 per kg, while private gas costs more than double that at Tk 153.06 per kg. Those involved say the huge price gap fuels various irregularities with government LPG.

The proposal to raise the government LPG price was submitted to BERC back in February and has recently been published. It calls for pricing in line with the Saudi contract price (CP), alongside raising dealers' transport costs from Tk 21 to Tk 48 and their commission from Tk 20 to Tk 52.

The state company's argument is that BERC raised its 12.5kg cylinder price from Tk 690 to Tk 825 in May 2025, while last January the private cylinder price was set at Tk 1,360. Because the BPC cylinder is so much cheaper than a private one, government gas is cross-filled into private cylinders and sold far above the set price, so many consumers at the grassroots never get government LPG at the low price.

Another argument notes that the state refinery, Eastern Refinery Limited (ERL), produces LPG by mixing propane and butane in a 35:65 ratio. It is therefore reasonable, the proposal says, to set government LPG prices each month by averaging the two components' Saudi CP prices in the same 35:65 ratio, as is done for the private sector.

BERC first set government and private LPG prices in April 2021 under a High Court directive. In October that year the method changed, and the commission began setting private LPG prices in line with Saudi Aramco's monthly contract prices.

The private companies, for their part, cite higher bank loan interest rates, transport costs, and plant operation and safety expenses in seeking adjustments at various marketing stages, including higher commissions. Their new proposals ask for higher per-kg storage and bottling costs, higher distributor and retailer commissions, and a higher return on investment.

Yet the cost figures in the private companies' proposals differ widely. Per-kg storage and bottling costs have been proposed at Tk 12.25 by Omera LPG, Tk 25 by Fresh LPG, Tk 30 by Delta LPG and Tk 19.50 by Petromax LPG.

Omera's proposal says BERC assumes operator costs of about Tk 212 per 12kg refill cylinder up to the plant level, excluding ship freight, VAT and transport to the warehouse, while operators' actual costs are around Tk 478. The company proposed keeping the distributor commission at Tk 50 while raising the retailer commission from Tk 45 to Tk 80. Showing lower costs in a few areas, Omera's overall calculation still amounts to a price rise of about Tk 300.

Meghna Group's Fresh LPG proposed raising storage and bottling costs per kg from Tk 16.74 to Tk 25, the distributor commission from Tk 4.17 to Tk 10 per kg, and the retailer commission from Tk 3.75 to Tk 12.50.

Meghna says bank loan interest has risen to about 15 percent a year, and cylinder safety testing, maintenance and transport costs have also gone up. The company also proposed counting a 20 percent annual return on investment.

Delta LPG demanded storage and bottling costs of Tk 30 per kg, up from Tk 15.95, proposing a distributor commission of Tk 8.33 per kg and a retailer commission of Tk 10.

Petromax LPG applied for storage and bottling costs of Tk 19.50 per kg, alongside a turnover tax of Tk 1.50 per kg and financing costs of Tk 8.12 per kg.

BERC has also published applications from four distributor companies — M S Taher Enterprise, Ma Enterprise, Jamal Agency and Ujjal Traders — seeking a distributor commission of Tk 150 instead of Tk 50 per 12kg cylinder and a retailer commission of Tk 70 instead of Tk 45.

The 29 October public hearing will open the way to decisions on these proposals. But with cylinders already selling hundreds of taka above the set price before any hearing, consumers are asking whether effective monitoring will stop the overcharging before any price rise is even considered.