National economy of Bangladesh highly dependent on LPG sector: Webinar

LPG has gained wide popularity as an environment-friendly alternative in Bangladesh as well as around the world. In addition to the government, the role of the private sector is also significant in the development of this sector. Recently, in a webinar titled ‘An overview of LPG industry in Bangladesh’, organized by G-Gas, the speakers shed light on the prospects, challenges and way forward for the country’s LPG industry.

Naweed Rashid, Director of Energypac and Zakaria Jalal, Head of Planning and Strategy of Bashundhara Group, expressed remarkable views as speakers at the webinar. Business and energy expert Abu Sayed Raja moderated the event.

Energypac director Naweed Rashid said in the webinar that the global business demographics have changed significantly in the last three years. First, the global supply chain was disrupted due to Covid-19. Then the Ukraine-Russia conflict created a worldwide dollar crisis and recession. To keep the price of LPG affordable at the consumer level, the government should provide subsidies to the power sector and other relevant sectors. Moreover, year-on-year adjustment of LPG prices could be another solution; otherwise a sudden 20-30 percent hike in the price will have a negative impact on the customers.

Besides, Naweed opined that investors in the LPG sector need policy support from stakeholders. “In case of power plants, the bank allows a payback period (investment return) of 8-9 years, but in the LPG sector, this time period is only 5-6 years. Our national economy is heavily dependent on the LPG sector. Therefore, the payback period (time period for investment return) in this sensitive sector should be at least 10 years”, he added.

Zakaria Jalal, Head of Planning and Strategy of Bashundhara Group, said at the webinar that the LPG sector has already witnessed an overinvestment. The sector is facing intense competition due to overinvestment. He also addressed the issue of price difference between the Bangladesh Energy Regulatory Commission (BERC) and the companies operating in the LPG sector. He added, the price of LPG depends on the dollar price. As a result, if the directive price (maximum and minimum) is fixed without determining any fixed price, then the price of LPG will remain stable in the market.

The speakers highlighted that the country’s LPG sector has huge potential despite various economic challenges such as inflation and expressed hope that this sector will develop further in the future and contribute to the national economy.

This article has been posted by a News Hour Correspondent. For queries, please contact through [email protected]
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