10 LPG operators deny allegations of import from sanctioned countries

Ten leading liquefied petroleum gas (LPG) operators in Bangladesh have vehemently denied allegations of importing LPG from sanctioned countries, dismissing the claims as an attempt to destabilise the domestic market.

Under the banner of LPG Operators of Bangladesh, the companies, including Meghna Group's Fresh LPG, TK Group's Delta LPG, Energypac, Unitex, Navana, Orion, BM Energy, JMI, Jamuna Spacetech, on 16 October sent a letter to the energy adviser, urging action on the matter.

They state that a letter from LPG Operators Association of Bangladesh President Azam Chowdhury regarding the import of LPG from a sanctioned country is motivated by an agenda. They claim that the letter was intended to control the market.

Azam, who is also chairman of East Coast Group, submitted letters to the Bangladesh Bank governor and the Chattogram Port Authority on 29 September and 6 October, respectively, raising allegations regarding the import of LPG from sanctioned countries.

The letter alleged that LPG is being illegally imported from Iran, which is under western sanctions. In a recent letter to the chairman of the port, a request was made to halt the unloading of LPG from the tankers Captain Nicholas and Gas GMS and to conduct an investigation. 

However, due to a lack of evidence supporting the allegations, the customs and port authorities have not taken any action, according to officials familiar with the matter. LPG is currently being unloaded from these two vessels, they told TBS.

Meanwhile, in the letter addressed to the energy adviser, the 10 operators expressed deep concern on behalf of the owners of Bangladesh's LPG industry regarding the various allegations made by Azam, the proprietor of Omera LPG. They stated that his accusations are creating instability in the LPG industry and pose a threat of monopolistic influence in the market.

The letter states that Bangladesh's LPG industry strictly adheres to all international and national regulations for imports and operations. It assures that no entity within the industry is involved in transactions with sanctioned states, organisations, or vessels. 

LPG imports are conducted through letters of credit (LC) issued by listed banks, which ensures compliance with the regulations of both domestic and international banks, along with thorough verification of import documents to secure the shipment of goods and financial transactions, states the letter.

The ten companies that signed the letter claim to supply 80% of the country's LPG and further state that they view the attempts by Omera LPG to monopolise the market over the past 6-7 years as a threat to the energy sector. They emphasise that any disruption in the market for essential products like LPG will negatively impact related employment, investment, normal supply of goods, and lead to rising market prices, ultimately affecting the economy.

Although Azm identified Merano Petrochemicals from the United Arab Emirates as the company importing LPG from the sanctioned country, the 10 companies claim that Omera Petroleum Limited has also imported goods from the same supplier. They describe the Azam's letter as a case of business rivalry.

Azm said LPG imports from the supplier should have been stopped long ago. Azam told TBS, "As soon as we found out that this company was on the sanction list, we stopped all transactions with it.

In the letter, the 10 operators also accused Omera of money laundering due to excessive fuel imports.

They stated that 85% of the country's LPG is imported from the Middle East, with a premium price of $90-100 per tonne. However, the price of the LPG imported by Omera is at a premium of $115-125 per tonne, they say. 

The operators allege that through over-invoicing, Omera is importing in the name of its company, MJL Singapore, thereby facilitating additional money laundering.

Azam told TBS, "We declare the prices at which we import. Therefore, there is no scope for money laundering. If other companies are importing at lower prices, they should also declare it."