Govt should subsidise LPG sector: Experts
Given the dependence of LPG prices on the dollar rate, establishing a directive price range – both maximum and minimum – without specifying fixed prices could effectively stabilise LPG prices in the local market, said one of the experts
Experts have called for government subsidies for the liquefied petroleum gas (LPG) sector, given its substantial impact on the national economy.
"To ensure affordable LPG price at the consumer level, the government should provide subsidies to the power sector as the national economy depends on it heavily," said Energypac Director Naweed Rashid at a webinar titled "An overview of LPG industry in Bangladesh" yesterday.
"Moreover, year-on-year adjustment of LPG prices should also be considered; otherwise, a sudden 20-30% hike in the price will adversely affect the customers," he said.
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He also pointed out that unlike power plants where banks allow eight to nine years of payback period for investments, the LPG sector has a much shorter payback period of five to six years. He said the sensitive nature of this sector warrants a payback period of at least 10 years.
Zakaria Jalal, head of Planning and Strategy at Bashundhara Group, said the LPG sector has experienced overinvestment, leading to intense competition.
He also addressed the price disparity issue between the Bangladesh Energy Regulatory Commission and LPG companies.
He further emphasised that, given the dependence of LPG prices on the dollar rate, establishing a directive price range – both maximum and minimum – without specifying fixed prices could effectively stabilise LPG prices in the local market.
The webinar featured discussions on the prospects, challenges, and future of Bangladesh's LPG industry. Speakers expressed optimism about the sector's potential for growth despite economic challenges and underscored the importance of both government and private sector involvement in advancing the industry.
