Demand for LPG up on eve of Eid

Highlights:

• Demand for LPG increased by 30% compared to that in April, May
• Household LPG consumption rises as people avoid eat-outs
• Households are biggest consumers of LPG in Bangladesh
• LPG use in commercial level yet to pick up pace
• Low customer turnout in restaurants mean low LPG use

The demand for Liquefied Petroleum Gas (LPG) has increased by 30 percent after a massive fall in April and May – during the countrywide general holidays.

LPG demand mostly increased in the domestic level due to the rise in household consumption, as people are avoiding eating-out at restaurants as a precaution against the Covid-19 pandemic.

Besides, people from almost all parts of the country are hoarding the liquid petroleum product before the forthcoming Eid-ul-Adha, the second largest religious festival of the Muslim community.

Households are the biggest consumers of LPG in Bangladesh.

Businessmen related to the LPG trade said they have been experiencing an increasing demand at the domestic level since March – when the government had declared countrywide holidays and shutdown.

However, the use of the petroleum product at the commercial level is yet to return to its previous pace. Restaurants are heavy consumers of LPG in the commercial sector.

Zakaria Jalal, general manager of Bashundhara LPG, said, "We are still suffering from sluggish commercial sales as the hotels and restaurants are not fully open. As Eid is approaching, we are witnessing some domestic consumption growth.

"Commercial consumption needs to increase to get back to the normal pace."

Prior to the Covid-19 outbreak in Bangladesh, the demand for LPG was 2,700 tonnes per day and 80,000 tonnes in a month, according to sources. But consumption has decreased to 1,700 tonnes in a day as major consumers remain mostly inactive.

In urban areas, restaurants usually consume around 15-20 percent of the total LPG demand.

However, people are now mostly staying at home and avoiding restaurant food amid the coronavirus outbreak. Many restaurants are now open, but the majority of the people are unwilling to eat-out as a precaution against the deadly virus.

Employees at commercial offices – who used to have lunch at restaurants – are now carrying homemade meals.

Moreover, the price of a cylinder of LPG has recently dropped.  A 12-13kg cylinder was selling for Tk850 on Saturday, down from Tk1,150-Tk1,050 in January-April. Such factors have contributed to the rising demand for LPG in households.

Chowdhury Yameen Anam, director of Euro Petro Product Ltd (Euro LPG) told The Business Standard, "The demand for LGP has increased 30-35 percent in Chattogram. Especially for the 12-13kg cylinder, that is used in homes. Since March, the demand has increased steadily."

"We have 250,000 cylinders and we use to sell around 200,000 cylinders every month. But now, our sales have increased by 30 percent compared to sales in March. We supply all over Chattogram except to the Bandarban district."

Taslima Begum, a resident of Chawkbazar Subashati Syed Centre, said, "Before Covid-19, we used to go out for food, and sometimes we had lunch at the office. But now we are staying at home.

"A 12kg cylinder used to last up to 25-26 days. Now we can use it for around 14 days because our consumption has increased. As we are staying home, we prepare tea frequently. To pass time, I also cook different food items, which we used to buy from bakeries before the outbreak."

Rasheda Begum of Natun Bridge area in Chattogram said, "We used to be very cautious about  consuming gas, but now the prices have dropped to around Tk850 per cylinder. Our consumption has also doubled now as we are staying at home."

Responding to a query, BM LP Gas Director Mujibur Rahman said, "Our Company has also recorded around 30 percent increase in sales in the market. The demand of 12kg cylinders is mostly increasing since March. We offer 12kg, 20kg, 33kg and 45kg cylinders for sale."

In Chattogram, the total demand for LPG is 15,000 metric tonnes. There are currently around 45 lakh LPG cylinders of all companies – including the 12kg, 35kg and 45kg variants – in the market, Anam said.

Currently, 20 percent of the total population in Bangladesh is using LPG gas for cooking, and the total number of users is around 40 lakh. The sector has a capacity of supplying 2 million tonnes of cooking gas annually.