BERC for highest Tk 954 for 12 kg LPG container
The Technical Evaluation Committee (TEC) of Bangladesh Energy Regulatory Commission (BERC) suggested that price of Liquefied Petroleum Gas (LPG) should be re-adjusted every month.
It also suggested introduction of a pricing formula to fix the LP gas price in domestic market in line with the international market.
The TEC recommended fixing price of a 12-kg LPG container of private company at Tk954 as the highest and Tk 758 as the lowest against the current price of Tk 1,259.
However, the price of state-owned company's 12.5 kg container is Tk 902 where the government gives a subsidy of Tk 300.
The BERC will announce its final verdict in 90 days. The BERC suggested the commission that it should use LPG's cross subsidy fund here for keeping the volatile LPG market at consumers' tolerance level.
The TEC presented its report on both private companies' proposals and also public companies proposal.
The TEC made all these comments at public hearing on fixing retail price of LPG in domestic market in presence of BERC Chairman Md Abdul Jalil and its full panel members at BIAM Auditorium.
Meanwhile, BERC concluded its historic maiden public hearing on fixing retail price of LPG in domestic market on Thursday seeking more participation or submission from all quarters of the people by January 21.
"To make an even field across the country, TEC said the retail price of LPG would be based on the import parity price (IPP) + bottling and storage charges + distribution charges + dealers' margin and VAT. The price of Auto Gas would follow the IPP + bulk transportation cost + station Charges + VAT + storages and bottling charges," the technical committee said.
It also said IPP means that the Saudi Contract Price (Saudi CP) + premium charges + freight cost of LPG.
In line with a court instruction, BERC started the three-day public hearing on Thursday but it was concluded in the first day as most of the technical issues were sent to the technical committee to discuss first.
The most interesting thing is there was no big debate over the pricing issue rather consumers' right body, CAB raised issues related with the 'power and authority' of the BERC and its autonomy.
"We concluded the formal hearing today (Thursday). We heard from the major stakeholders of the public and private players, CAB, and the representatives of the political parties and officials, but considering the Corona period we are inviting all other people to post their valued opinion on our website by January 21," BERC Chairman Md Abdul Jalil said in his concluding remarks.
Six officials from 6 major LPG traders presented their written arguments on behalf of the LPG Operators Association of Bangladesh, LOAB.
They sought 9.0 percent profit on LPG sales or TK , taking into consideration the international price of the fuel including its freight, premium rate, bank interest rate, cylinder cost and different tax measures.
Both the consumer right groups and business operators demanded stoppage of the administrative interference in the price fixing process of liquefied petroleum gas (LPG) moved by the energy regulatory body.
They urged for determining a single regulator to play watchdog role in ensuring a fair price of the LPG at consumers' level by protecting both the interest of the consumers as well as the operators of the business.
Managing Director of the state-owned LGP Company Limited Fazlur Rahman and also top executives of six other private LPG companies made their presentation in the hearing while Deputy Director of BERC Quamruzzaman presented the Technical Evaluation Committee (TEC) report.
Prof M Shamsul Alam, Advisor of the Consumers Association of Bangladesh (CAB), Ruhin Hossain Price of Communist Party of Bangladesh (CPB), Mohiuddin Ahmed of Bangladesh Mobile Phone Consumers Association took part in the public hearing.
"Interference of Energy Division in LPG price fixing process is clear violation of the BERC Act-2003 which gives a clear mandate to the energy watchdog to fix the prices of 25 petroleum items including this liquefied petroleum gas", said CAB Advisor Prof M Shamsul Alam. TEC also urged the commission to ensure safety, security and standard of LP bottles to ensure consumers' rights at the highest level.