News
Global prices rise, but contrasting gas tabs in Dhaka and Colombo
Sri Lankans are still wrestling with each other at gas dealerships, cursing the embattled Gotabaya Rajapaksa government for the comatose operations of state gas company Litro Gas, and the only private supplier, Laugfs Gas, but in Bangladesh, people are paying 591 taka, or the Sri Lankan rupee equivalent of about 2,431 for a 12.5 kilogram canister.
In global markets, LPG prices have been rising, as indicated in Saudi Aramco prices for propane and butane.
Millions of Sri Lankan households are in stunned disbelief due to frequent, record price increases by Litro Gas and Laugfs Gas amid lengthy periods without cooking gas deliveries to dealers.
Litro Gas, owned by Sri Lanka Insurance Corp, slashed supply from this week to a mere 30,000 canisters a day. There is no certainty over regular supplies.
Though not comparable in market size, or volume of gas consumed, in Bangladesh, state-owned Liquid Petroleum Gas Limited, which supplies about 5% of the domestic market, says a 12.5kg canister will retail at Tk 591 from May 1.
In Bangladesh and Sri Lanka, different factors are at play in pricing. About 3.8 million homes are estimated to use gas in Bangladesh. Private Bangladesh companies such as Omera Petroleum, have drawn multimillion-dollar investment from International Finance Corp of the World Bank Group.
Bangladesh is also a creditor to bankrupt Sri Lanka.
Prices are set by the Bangladesh Energy Regulatory Commission, which is barely effective in its supervision of LPG retail prices.
On April 29, the regulator lowered the price of a 12 kg LPG cylinder supplied by private companies at Tk 906, (about Rs 3,728), compared with Tk 975 (about Rs 4,012), previously.
Gas retail prices in Bangladesh take into account Saudi Aramco contract prices.
There are more than two dozen private gas suppliers in the market. Laugfs Gas (Bangladesh) is also a supplier.
In Sri Lanka, Litro Gas jacked up the price of a 12.5kg cylinder price by about 45% to a record Rs 4,860 from the midnight of April 26. Laugfs Gas also raised prices to a record high in March. The price of a 12.5kg cylinder was raised by Rs 1,359 rupees to Rs 4,199.
Saudi Aramco propane in December 2020 was US$450 and butane was US$460. By 2021, the prices had shot up to US$795 and US$750, respectively. This April, the prices are US$940 and US$960, respectively, compared with US$740 and US$710 in January. Saudi Aramco’s January 2022 contract price was US$55 lower from December 2021.
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