Bangladesh Reduces LPG and Auto Gas Prices
Bangladesh has taken a step to ease the financial burden on consumers by reducing the prices of Liquefied Petroleum Gas (LPG) and auto gas. The new pricing structure will take effect at 6 pm today, as announced by the Bangladesh Energy Regulatory Commission (BERC).
LPG Price Adjustment
The BERC Chairman, Jalal Ahmed, revealed that the price of a 12 kg LPG cylinder has been set at Tk 1,364 for the month of July. This represents a decrease of Tk 39 from the previous price of Tk 1,403. This adjustment follows a similar reduction made on June 2, when the price was lowered by Tk 28 to reach Tk 1,403.
The decision to lower the LPG price is based on the fluctuating global market conditions and the cost of raw materials used in the production of LPG. The BERC takes into account various factors, including international fuel prices and local economic indicators, to determine the final consumer price.
Auto Gas Price Reduction
In addition to the LPG price cut, the commission also reduced the price of auto gas. For July, the consumer-level price of auto gas, including VAT, has been set at Tk 62.46 per liter. This is a reduction of Tk 1.84 compared to the previous rate. The last adjustment to auto gas prices occurred on June 2, when the price was lowered by Tk 1.27 to Tk 64.30 per liter, including VAT.
The reduction in auto gas prices is expected to provide relief to vehicle owners, particularly those who rely heavily on this fuel for daily commuting and transportation needs.
Pricing Mechanism and International Factors
The BERC stated that the price adjustments for both private LPG and auto gas are influenced by the Saudi Aramco's announced Contract Price (CP) for propane and butane. For July, the CP for propane is set at $575 per metric ton, while butane is priced at $545 per metric ton. With a propane to butane ratio of 35:65, the average CP for these two gases comes out to $555.50 per metric ton.
These international prices play a crucial role in determining the domestic pricing of fuels in Bangladesh. The BERC closely monitors global energy markets to ensure that the prices remain competitive and fair for consumers.
Price Trends in 2024
Throughout 2024, the prices of LPG and auto gas have seen a mix of increases and decreases. In total, there were four instances where prices were lowered and seven times when they were increased.
Notably, in December of the previous year, the prices remained unchanged. However, there were several months where the prices saw an upward trend, including January, February, March, July, August, September, and October. On the other hand, the prices were reduced in April, May, June, and November of the same year.
This fluctuation highlights the sensitivity of fuel prices to global market dynamics, supply chain issues, and government policies. Consumers can expect continued volatility in fuel prices, depending on external factors such as geopolitical tensions, oil market fluctuations, and changes in domestic regulations.
The recent reductions in LPG and auto gas prices are a welcome development for households and businesses alike, offering some respite from rising living costs. However, the ongoing challenges in maintaining stable fuel prices underscore the need for long-term strategies to ensure energy security and affordability for all.
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