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Energy Pack Limited’s Rupganj G-Gas Satellite Plant-101 is supplying 200 metric tons of liquefied petroleum gas (LPG) daily to Dhaka, Mymensingh, Chittagong and Sylhet divisional areas.
Chief Business Officer (CBO) Abu Saeed Raja said this to Dhaka Tribune during a plant visit at the Rupganj G-Gas Satellite Plant-101 in Narayanganj on Sunday.
Energypack imports 70,000-80,000 metric tons of LPG annually from abroad. The main plant of G-Gas in Khulna has a storage capacity of 5,000 metric tons, according to Abu Saeed. From there, LPG is being supplied to Barisal, Khulna, and Rangpur regions.
G-Gas currently has a total storage capacity of 6,000 metric tons of LPG with its main plant in Khulna, Rupganj G-Gas Satellite Plant-101, and an LPG carrying ship.
The LPG carrying ship “MT-G-GAS 101” has a capacity of 600 metric tons to transport and distribute LPG even safer and faster. “Another similar vessel will be added to the fleet and has been ordered from Japan. It will increase our distribution capacity,” the CBO said.
He said that G-Gas Satellite Plant-101 has been set up at Rupganj to supply LPG easily to consumers in Dhaka, Mymensingh, Chittagong, and Sylhet areas. The ship regularly transports 600 metric tons of gas for distribution between Khulna and Narayanganj.
The company also utilizes nine road tankers as the backup to transport LPG on-road, but it is far costly and takes several days to a week for distribution. In contrast, the ship can distribute far more volume of LPG in just 24-28 hours or a day and a half.
G-Gas currently bottles LPG in 12kg, 35kg, and 45kg cylinders. In terms of consumer demand, the 12kg cylinder dominates the consumer demand, representing 95% of it, said the CBO.
However, LPG supply to consumers at an affordable price is still a challenge due to multiple factors but can be buffered possibly, if distribution costs can be reduced.
“Even three months back, our 12kg cylinders cost the consumer somewhere between Tk1,100-Tk1,200, which now costs around Tk1,400,” Abu Saeed pointed out.
Firstly, there is the global issue. The Russia-Ukraine war, global inflation, the mounting production cost and transportation costs, have led to a price hike for food and fuel, he explained. Then there is the distribution problem.
“Distribution of LPG already has challenges. For example, although transporting and distributing LPG using ships is preferable and affordable, several barriers such as the draft of the river, and the jetty capacity among others force us to depend on distribution by road, which eventually has an impact on the pricing of it,” CBO explained.
Moreover, the Bangladesh Energy Regulatory Commission (BERC), which has set a maximum retail price (MRP) for such products, is not business-friendly or sustainable, according to the CBO of G-GAS.
As per the official, the profit margin on distributing each 12kg gas cylinder has been set at Tk34 at the distributor level and Tk38 at the retailer level.
“This raises questions on the sustenance of the investments made by businesses in the sector as they have been subsidizing costs to make LPG gas affordable to consumers,” Abu Saeed Raja said.
BERC pricing is not business-friendly or sustainable after accounting for overhead costs across multiple aspects of the distribution process including transporting, bottling, storing and other barriers.
Asking the government to consider the LPG sector, he said the government has not been able to meet the demand for gas through its own production due to the gas crisis.
Privately imported LPG is playing a big role in meeting the demand for gas at this time.
According to the CBO, only 3-4% of local LPG demand is met through local producers, the rest of the chunk, which is 96-97%, has to be imported.
If this sector is to be saved then the government has to relieve the pressure on it to some degree, the CBO argued.
He also demanded the Energy Regulatory Commission (BERC) to increase the dividend of LPG suppliers at the dealer and retailer levels.
In that regard, the BERC had already made recommendations of increasing the price of gas used in captive power by 132%.
Energy Pack started importing LPG for the first time in 2016. On March 28, the energy pack company Rupganj G-Gas Satellite Plant-101 officially started its journey.
The Prime Minister’s Adviser on Power, Energy and Mineral Resources. Tawfiq-e-Elahi Chowdhury inaugurated the plant.
(DT)
