Bangladesh’s liquefied petroleum gas (LPG) market remains under pressure, with supply shortages continuing despite a recent increase in regulated prices. Distributors say only six companies are supplying the market regularly, and even those suppliers are unable to meet demand. As a result, consumers are paying Tk 2,300 to Tk 2,500 for a 12kg cylinder, well above the government-fixed retail price of Tk 1,837.
The price difference means customers are paying between Tk 463 and Tk 663 more than the official rate for the country’s most widely used household LPG cylinder. The continuing shortage has raised concerns about distribution practices, pricing enforcement and the affordability of cooking fuel for millions of households.
The Bangladesh Energy Regulatory Commission (BERC) announced the latest price adjustment on 4 October. It raised the maximum retail price of a 12kg cylinder from Tk 1,585 in September to Tk 1,837 for October. However, the adjustment has failed to bring prices in the market under control.
Distributors demand higher commissions
The LPG Business Welfare Association wrote to BERC on 6 October, requesting action over rising operating costs and a review of distributors’ commissions. According to the association, LPG companies issued their own price lists on the evening of the regulator’s announcement, setting prices for 12kg cylinders at between Tk 1,740 and Tk 2,000.
The association cited higher fuel prices, transport costs, licence fees and other operating expenses as reasons why distributors were struggling to sell cylinders at the regulated rate. It argued that the commission paid to distributors had remained unchanged for around five years, despite increases in the cost of running their businesses.
In its letter, the association outlined the expenses involved in transporting cylinders from companies to distributors’ warehouses and then delivering them to retailers. Transport from a company’s premises to a distributor’s warehouse costs Tk 50 per cylinder. Loading, unloading and delivery to retailers account for another Tk 35, while staff wages, warehouse rent, electricity bills, licence fees and other operating expenses add Tk 25.
The association also wants a profit margin of Tk 40 per cylinder. According to its calculation, these costs and the desired margin bring the total to Tk 150 per cylinder. Distributors currently receive a commission of Tk 50, leaving what the association describes as a shortfall of Tk 100.
The organisation said differences between companies’ price lists had contributed to instability in the market. It urged the authorities to protect legitimate business interests while ensuring that consumers were not forced to pay excessive prices.
The letter, signed by association president Md Selim Khan, was also sent to the Ministry of Power, Energy and Mineral Resources, the Ministry of Commerce, the Directorate of National Consumer Rights Protection and district administration offices.
BERC insists on formal review
BERC maintains that the regulated wholesale price of a 12kg cylinder is Tk 1,742. Distributors receive a commission of Tk 50 per cylinder, meaning they are expected to supply retailers at Tk 1,792.
The regulator has acknowledged receiving the association’s letter but says it cannot adjust the cost structure without a public hearing.
BERC chairman Jalal Ahmed told Prothom Alo that the commission would consider the distributors’ proposals at a meeting scheduled for the following Sunday before deciding on the next steps. He also said the commission would discuss with businesses the need to maintain the prescribed prices until a new decision was made.
BERC has been setting LPG prices since April 2021, when the commission for distributors was fixed at Tk 50 per cylinder. Distributors now want the amount increased to reflect higher operating costs.
However, the dispute over commissions has not resolved the central problem facing consumers. Even after official prices are revised, customers continue to report paying substantially more than the regulated rates. The shortage has also meant that some consumers struggle to obtain cylinders even when they are prepared to pay the higher prices.
Households bear the burden of rising costs
For families that rely on LPG for cooking, the immediate consequence is a significant increase in household expenditure.
Tamanna Akhtar, a resident of Shewrapara in Dhaka’s Mirpur area, told Prothom Alo on Thursday that she had paid Tk 2,500 for a 12kg cylinder delivered to her home on Wednesday. The amount was Tk 663 above the official retail price.
Such additional costs place pressure on household budgets, particularly in areas where families depend on cylinder gas because they do not have access to piped natural gas. Unlike some other household expenses, cooking fuel is a recurring necessity, leaving consumers with limited scope to avoid the additional expenditure.
The situation has also raised questions about the effectiveness of the existing price-control system. While BERC sets the official price, the persistence of substantial differences between that rate and the prices charged in the market suggests that enforcement remains a challenge.
Distributors report supply cuts
Distributors say several LPG companies began reducing supplies on 20 September. According to their account, Meghna Fresh, Omera, iGas, Jamuna, Petromax and BM are the principal companies supplying the market regularly. They say these companies are selling at BERC-prescribed prices, while some other suppliers provide only small quantities intermittently and charge higher prices.
Distributors have also alleged that certain companies have issued price lists of Tk 1,960 to Tk 2,000 for a 12kg cylinder despite failing to supply sufficient quantities. The resulting uncertainty has made it harder for distributors to obtain enough stock and meet customer demand.
They argue that selling at the regulated price could leave them losing as much as Tk 150 per cylinder, taking their operating costs into account. Some have warned that they may consider suspending sales if BERC does not address their demands.
Such a move could worsen the difficulties facing households, retailers and businesses already affected by the shortage. However, the distributors’ claims about their costs and losses remain part of an ongoing dispute with the regulator, which has yet to approve any changes to the existing commission structure.
The situation highlights the challenge of balancing the financial concerns of distributors with the need to protect consumers from excessive prices. Any adjustment to commissions would need to follow BERC’s regulatory process, while the authorities would also need to ensure that the benefits of any revised pricing arrangements reach customers.
Imports remain broadly stable, industry body says
Despite reports of shortages, the LPG Operators Association of Bangladesh (LOAB), which represents businesses involved in importing and supplying the fuel, says import volumes have remained broadly stable.
According to the association, Bangladesh imported 158,000 tonnes of LPG in August and 156,000 tonnes in September. The figures suggest that imports have not experienced a sharp decline, although the association says it may take additional time for supplies to increase throughout the market.
The reported import volumes and the shortages experienced by distributors and filling stations point to a gap between national imports and the quantities reaching individual outlets. The figures alone, however, do not establish why certain distributors are receiving less gas than they need.
The authorities and industry participants may need to examine the distribution chain, including stock availability, delivery schedules and the allocation of supplies among companies and distributors. Better coordination and more transparent information about stocks could help identify where the bottlenecks are occurring.
Filling stations struggle to meet demand
The shortage is affecting transport businesses as well as households. LPG is used not only for cooking but also in industry and transport, and filling stations are reporting substantial difficulties obtaining sufficient supplies.
Hasin Parvez, general secretary of the LPG Filling Station Owners Association, told Prothom Alo that a station requiring 30 tonnes of LPG a month was receiving only five to six tonnes.
The shortage has reduced the volume of gas available for sale, leaving filling stations facing losses, he said.
The shortfall is significant: stations are receiving only a fraction of the quantities they say they need. If the problem continues, it could affect businesses and motorists that rely on LPG as a vehicle fuel. The impact will depend on how long the shortages persist and whether suppliers can restore deliveries to normal levels.
Demand has grown since residential gas connections stopped
Bangladesh has approximately 10 million LPG customers, with around 80 per cent of consumption used for household cooking, according to figures cited in the report. Demand rose substantially after new residential natural gas connections were halted in 2015.
Annual LPG demand now exceeds 1.5 million tonnes. The sector is almost entirely privately operated, with private companies responsible for importing and supplying the fuel. LPG is used in homes, industrial establishments and the transport sector.
The growing dependence on LPG makes a reliable supply chain particularly important. Even when imports remain stable, disruptions in distribution can leave households and businesses without sufficient supplies. The market’s reliance on private suppliers also places greater importance on monitoring company stocks, deliveries and pricing practices.
The current situation raises two distinct issues. Distributors want higher commissions to cover rising costs, while consumers need reliable access to cylinders at the regulated price. Addressing one concern without the other may leave the underlying problem unresolved.
Nationwide inspections target excessive prices
The Directorate of National Consumer Rights Protection has launched inspections across the country to curb the sale of LPG cylinders at excessive prices.
Director Atia Sultana said the directorate conducted 242 operations between 2 September and 6 October to monitor cylinder sales. A total of 478 businesses at distributor and retail levels were penalised, with fines amounting to Tk 1.125 million.
The inspections continued over the two days preceding her remarks.
The enforcement campaign demonstrates that authorities are taking action against businesses found violating consumer-protection rules. However, the continued gap between official and market prices suggests that inspections alone may not be enough to restore stability.
Consumers need both an adequate supply of LPG and confidence that cylinders will be sold at the prescribed rate. Improving distribution, monitoring company pricing and ensuring compliance at retail outlets will be important in addressing the problem.
The next steps will depend partly on the outcome of BERC’s discussions with distributors. Any revision to commissions or operating-cost allowances will have to follow the regulator’s prescribed procedures. At the same time, the authorities will need to address reported supply constraints and strengthen oversight of the prices charged throughout the distribution chain.
For millions of households, the immediate concern is simple: LPG must be available when needed and sold at a price they can reasonably expect to pay. Until supplies improve and price enforcement becomes more effective, consumers are likely to continue bearing the financial cost of the market’s unresolved problems.
