An LPG reserve is an energy security investment Bangladesh can no longer postpone

That view is too narrow. Bangladesh needs an LPG reserve as part of its energy security strategy, alongside policies that allow the sector to invest, import and supply reliably. The case is especially strong because private operators have developed the country’s LPG supply chain without a direct government subsidy for LPG imports or sales.

Why a reserve matters

Bangladesh imports almost all the LPG it consumes. A disruption in international supply, vessel availability, financing or unloading can therefore affect domestic supply within a short period. Even when LPG is available to buy, an importer must secure foreign currency, open a letter of credit, arrange a vessel and bring the cargo through a port. If any step is delayed, existing stock must cover the gap.

The tanks operated by private companies provide working inventory for their normal business. They should not be mistaken for a national emergency reserve. Companies must refill those tanks, bottle LPG and serve their customers continuously. A tank’s stated capacity does not tell us how much LPG would be available to the country if imports stopped tomorrow.

The government should first establish a verified measure of national LPG stocks, incoming cargoes and daily demand. It should then set a phased reserve target, beginning with a practical level of cover and expanding as storage and financing become available. The target must be based on usable LPG, rather than the theoretical capacity of installed tanks.

This reserve need not wait for the construction of an entirely new state-owned system. The government could contract with qualified private operators to hold specified quantities or reserve verified storage capacity. Contracts should state when emergency stock may be released, how it will be replenished, and who will pay for storage and financing. They must also address a particular LPG risk: an operator holding stock bought at a higher international price may face a loss if the regulated selling price falls the following month.

A reserve is an insurance policy. Like any insurance, it has a cost. That cost should be assessed openly against the much wider economic damage caused by a prolonged supply interruption.

LPG can also support industry

The discussion of LPG often begins and ends with cooking. Its industrial role deserves equal attention. Where the equipment and economics permit, LPG can provide heat for boilers, dryers, ovens and other processes that would otherwise depend on natural gas. It can serve as a primary fuel in suitable facilities or as a backup that allows production to continue during a gas shortage. LPG is used in a range of industrial applications internationally.

This is particularly relevant to factories for which an interruption in process heat means lost production, missed deliveries or wasted materials. A secure LPG option could give such businesses greater control over their operations and reduce some pressure on the natural gas network.

The change, however, cannot be made by simply connecting an LPG cylinder to equipment designed for natural gas. The fuels have different characteristics. Burners, controls, storage, ventilation and fire protection must be assessed and, where necessary, modified by competent engineers. Each factory should compare the full delivered cost of LPG with its existing fuel arrangements before investing. The best opportunities are those where technical suitability, reliable supply and the value of avoiding downtime support the decision.

An industrial LPG market would make a national reserve more important, not less. Households and factories would both be relying on the same import chain. Reserve planning must account for essential domestic consumption and critical industrial demand, with clear rules for allocating fuel during an emergency.

Support the system that already supplies the country

Bangladesh’s private LPG operators have invested in terminals, vessels, storage tanks, bottling plants, cylinders and distribution networks. They have done so while the sector operates without a direct government subsidy for LPG. The right policy response is to help this supply chain become more resilient.

First, LPG imports need predictable access to foreign currency and timely letters of credit. Cargoes can be sold quickly; an approval delay may mean losing a shipment. Second, investment in storage and import infrastructure should be encouraged through a clear, stable tax and regulatory framework. Targeted relief for essential tank materials and equipment could expand capacity without requiring the government to build every facility itself.

Third, regulated pricing must reflect verified costs promptly, including freight, exchange rates, financing, port handling and distribution. The Bangladesh Energy Regulatory Commission adjusts LPG prices monthly, but operators must still be able to recover legitimate costs if they are to maintain supply and finance additional stock. Retail enforcement is equally necessary so consumers receive the benefit of the approved price.

Finally, the government should address maritime bottlenecks. More storage is of limited value if vessels cannot unload reliably. Surveys of import channels, improvements to navigational aids and a long-term plan for jetties capable of receiving larger vessels would strengthen the entire supply chain.

Protect consumers without weakening supply

Policy support for LPG operators should be tied to measurable public benefits: dependable supply, reserve commitments, transparent stock reporting and strict safety compliance. It does not require a blanket subsidy on every cylinder.

If the government wishes to make LPG more affordable for low-income families, a targeted LPG card deserves careful consideration. Direct assistance to eligible households would reach those who need help while allowing the market price to reflect the cost of supply. A pilot should test eligibility, payments and delivery before the programme is expanded.

Safety must remain non-negotiable. A larger reserve and wider industrial use will require rigorous standards for storage, transport, refilling and equipment. Illegal cross-filling, underweight sales and damaged cylinders threaten consumers and undermine responsible operators. Traceable cylinders, regular inspections and consistent enforcement are essential.

Bangladesh’s energy security depends on having options when a fuel source is constrained or an import route is disrupted. A properly funded LPG reserve would give the country time to respond to a supply shock. Safe industrial use could give suitable factories an alternative when natural gas is unavailable. Sensible policy support could help private companies provide both, without turning LPG into a permanently subsidised market.

The question is no longer whether LPG deserves a place in Bangladesh’s energy strategy. It already has one. The task now is to plan for the day when ordinary commercial stocks are not enough.