Liquefied petroleum gas (LPG) users are being cheated by bottling companies, which are selling at prices much higher than international rates and what Indian users pay. This has been disclosed by an energy ministry committee, headed by joint secretary Kaji Jabunessa Begum, recommending the formation of a government panel having bottling company representatives to control LPG prices.
State minister for power and energy Nasrul Hamid told The Independent, "We are serious about the popularity of LPG. We will do whatever is necessary because the government has withdrawn household gas connections. So it is our obligation to make LPG cheaper."
The government would determine the LPG price by forming a committee headed by a joint secretary of the Energy Division.
An energy ministry official said the LPG price depended on a largely fluctuating international market. So the domestic price should be pegged to the international market price, he added.
As per the report, a 12-kg LPG cylinder should not cost more than Tk. 732, but currently sells at Tk. 900–1,200.
The report observes that even the government-run company charges much more than the international price. For example, on 18 March, the Eastern Refinery’s 12.5 kg LPG production cost was Tk. 410 including imported crude and other costs. But it sold the cylinder at Tk. 533, and the price climbed to Tk. 1,000 after it passed through a middleman.
The committee observed that in India, 14.2-kg LPG cylinders were priced Rs 419.12 in Delhi, Rs 421.22 in Kolkata, Rs 458 in Mumbai, and Rs 407.72 in Chennai.
The committee suggested that government and private LPG prices should be determined  
and monitored by the government. Moreover, before fixing the price, the government should ascertain the landing cost and the retail price of LPG. The committee stressed the need for a pricing formula based on the C & F price, bottling margin, value-added tax (VAT), marketing margin, transport cost, and dealer profit.
The price could be 1.5 times higher than the C & F price. Besides, the government pricing committee should also consider the international propane and butane prices before fixing the LPG price, the report suggested.
At present, there is no LPG price regulation, and bottle weights are seldom checked, customers complain.
Istiaq Ahmed, managing director of Omera LPG, told The Independent.
“As the country’s economy is growing for the last 10 years and the GDP growth is nearly seven per cent, the demand for LPG is higher than expected. We are selling more than we had anticipated.”
The annual demand of LPG is five lakh MT. The country has 60 licensed LPG bottling companies but only nine are in operation at present.