Liquefied petroleum gas (LPG) traders in Bangladesh have withdrawn their threat to halt nationwide sales after receiving assurances from the Bangladesh Energy Regulatory Commission (BERC), easing concerns over further disruption amid an ongoing supply crunch.
The decision was announced on Thursday following a meeting at BERC’s headquarters, where leaders of LPG sellers’ associations held talks with the regulator.
Md Selim Khan, president of the LP Gas Traders’ Association, said the strike was called off after BERC accepted what he described as the traders’ “justified demands”.
Traders had threatened to suspend sales, citing mounting losses caused by rising procurement costs and enforcement drives. Selim Khan said retailers are currently paying more than Tk 1,300 for a 12kg cylinder, making it impossible to sell below Tk 1,500. “Selling at the government-fixed price is not viable under the current cost structure,” he said.
During the meeting, traders demanded a halt to ongoing administrative drives, higher commissions for distributors and retailers, and uninterrupted LPG supply.
BERC chairman Jalal Ahmed said the commission would raise concerns over enforcement drives with the relevant authorities and take legal steps to review existing charges.
He added that LPG operators had informed the commission that alternative arrangements were being made to import gas despite vessel shortages, and that supply conditions could improve within a week.
However, Jalal Ahmed reiterated that there was no justification for selling a 12kg LPG cylinder above Tk 1,306, the price fixed for January.
The LP Gas Traders’ Cooperative Association also confirmed the withdrawal of the strike, saying assurances from BERC — including steps to ease police harassment of LPG transport vehicles and a review of commission rates — prompted the decision.
The move comes amid reports of acute LPG shortages across the country in recent days, with allegations that some traders exploited the situation to charge excessive prices. Although the official price of a 12kg cylinder was Tk 1,253 in December, retail prices reportedly rose to between Tk 1,500 and Tk 2,500 in several areas.
The LPG Operators Association of Bangladesh (LOAB) has blamed retail-level traders for price manipulation and called for swift action against those responsible.
Energy ministry seeks VAT revision
Meanwhile, the Energy and Mineral Resources Division has written to the National Board of Revenue (NBR) seeking revisions to the VAT and tax structure on LPG imports and local production to help stabilise the market.
In a letter sent to the NBR chairman on Thursday, the ministry proposed exempting LPG from VAT and taxes at the local production stage, while setting VAT at 10 per cent or below at the import stage. The aim is to ease the current supply crunch and reduce pressure on consumers.
The ministry noted that about 98 per cent of Bangladesh’s LPG demand is met through imports by private companies and that LPG consumption rises in winter due to lower global supply and reduced domestic natural gas availability.
Referring to discussions at an advisory council meeting on 18 December, the ministry said a proposal to withdraw the existing 15 per cent VAT exemption at the import stage and instead impose a 10 per cent rate — while exempting local production and business-level VAT and advance tax — had been considered. However, it stressed the need to assess the potential impact on consumer prices.
While LPG operators have demanded zero VAT on imports, the energy division recommended revising import-stage VAT to below 10 per cent in view of the current crisis and urged the NBR to act swiftly.
Commission hikes require due process, says BERC
BERC chairman Jalal Ahmed said demands for higher commissions for LPG distributors and retailers were “reasonable” but must follow due legal process.
Speaking to reporters after the meeting, he said distributors had sought an increase in commission from Tk 50 to Tk 80 per cylinder, while retailers demanded a rise from Tk 45 to Tk 70. Other demands included an end to police harassment of LPG transport vehicles and a halt to mobile court drives by consumer rights authorities.
“The commission issue falls under BERC’s jurisdiction. If a formal application is submitted, it will be considered through the legal process, including a public hearing,” he said.
Jalal Ahmed noted that while there are about 11,000 LPG distributors nationwide, only 13 currently hold BERC licences, meaning only licensed entities can formally apply for commission revisions.
He also acknowledged complaints of harassment and said the commission had urged authorities to ensure fair treatment. “They were satisfied with our assurances and therefore withdrew the strike,” he said.
On supply, he said delayed LPG vessels expected at the end of December were now due to arrive, and the situation should normalise within a week. Addressing reports of excessive pricing, he said the regulator was proceeding cautiously to avoid unintended consequences while working to stabilise the market.