Dhaka – The government has finally abandoned its plan to provide subsidy to LPG sector fearing that it may create new complexities and become a source of corruption, sources at the Energy Division said. UNB news agency reported
The plan to provide subsidy was initially taken to make the liquefied petroleum gas (LPG) more popular, accessible and affordable to both the urban and rural consumers against the backdrop of depleting piped natural gas. And the reducing price gap between piped-gas and LPG was another target of the plan, according to the officials.
Confirming the government’s latest decision, State Minister for Power and Energy Nasrul Hamid said the subsidy-related plan was discarded mainly because of the government’s core strategy not to get into the ‘subsidy affair anymore.”
“We’ve pulled out of the plan as we want to put in place a regulatory mechanism to bring down the LPG price to affordable level for the common people,” he told UNB.
According to the junior minister, the LPG price is declining globally and the retail price of a 12-kg LPG container will come down to Tk 700-800 when the regulatory measures will come into operation.
Energy Ministry officials, who preferred not to be named, said they have to ditch the plan following an instruction from top policymakers who feel that the subsidy-related experience in different sectors is not good.
“The fact is that when the government introduces subsidy for a sector, it becomes impossible to get rid of it. Besides, it creates a scope for corruption at different levels. So, we’ve scrapped the plan,” a top official at Energy Division told the UNB correspondent.
He, however, admitted that the process to make a regulation for monitoring and controlling the LPG market is proceeding at a slower pace, and it is not clear when such regulation to be put in place.
Insiders said the Energy Division’s move to fix a regulatory mechanism faced a tremendous impediment following the mounting pressure by private sector LPG business operators as they are against such regulations.
According to the official sources, the Energy Division recently convened a meeting of the LPG operators to discuss its plan on market regulations.
Under this plan, they proposed fixing retail-level LPG prices and mandatory price tagging on bottles. Almost all the LPG-operating companies opposed the plan raising their objections terming it anti-open market economy policy.
Finally, a senior official said, the whole process got stuck and the relevant file is now gathering dust on the Energy Division secretary’s table.
Meanwhile, a high-level committee assigned to prepare a regulatory mechanism found in their study that all the companies are selling their LPG products at exorbitant prices.
The committee, headed by Kazi Zebunnesa Begum, found that the price of 12.5-kg of public sector LPG should not be sold above Tk 703 after meeting all the expenses while the same quantity of private sector LPG should not be more than Tk 732.
But, a 12.5-kg LPG is selling at Tk 1,400 at different places in suburban areas where people are facing gas crisis or gas connection is not available, said the sources.
Besides, a household consumer in Dhaka city is paying only Tk 600 for a single burner gas-oven and Tk 650 for a double burner gas-oven.
