Bangladesh has already issued 38 new licenses to private companies to build LPG storage and bottling plants for marketing the fuel in a move that is expected to further increase the country’s LPG demand.
The government has also issued nine licenses to companies that are already in the LPG business to help further strengthen their operations.
Demand for LPG in Bangladesh has seen strong growth in 2016 owing to the increasing suspension of natural gas connections and growth in the use of LPG as an auto fuel.
The cumulative growth of LPG in Bangladesh is around 12 % in the last couple of years. Its growth will mostly depend on the government’s strategic policy on providing new gas connections in future.
In 2015, annual consumption of LPG was about 2 million tonnes, and it was 3.5 million tonnes last year.
LPG consumption in Bangladesh is very negligible compared to most of other Asian countries.
In Bangladesh, only 2% population has access to LPG. Urban households, industries, and automobiles largely depend on natural gas.
More than 80 % of the demand is met by imports, and the LPG supplies are coming from Malaysia, Indonesia, Vietnam, Singapore, China, and Dubai.
Yearly demand is estimated to rise to 3 million tonnes, but the MPEMR estimates that actual demand could be around 5 million tonnes.
Once the new licensees start operations, it is expected that LPG will be available in most areas across the country, which in turn will raise consumption substantially.
Many consumers have to use kerosene and wood as alternatives to LPG due to lack of availability.
Currently, LPG is available only in cities and their adjacent areas in the country, adding that with the start of operation of new firms, LPG will reach the rural areas.
A number of LPG operators are in the local retail market and more are planning to enter the market.
Existing players in local LPG market are – Laugfs Gas, Totalgaz, Bashundhara, Jamuna Spacetech, and Linde import a combined yearly 280,000 metric tonnes from the spot market, leaving a supply shortfall of 200,000 metric tonnes.
State-owned LP Gas Ltd, a subsidiary of BPC, also produces 20,000 metric tonnes LPG yearly.