Bangladesh’s reliance on liquefied petroleum gas (LPG) has grown rapidly in recent years as natural gas shortages intensify. Yet the policies guiding this sector remain fragmented and often misaligned with market realities. While the government is preparing a consolidated LPG policy to provide clarity, industry insiders stress that private operators, responsible for nearly 99% of supply, must play a central role in shaping it.
From infrastructure gaps to safety lapses, the LPG industry faces mounting challenges that demand urgent policy attention and regulatory reforms.
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Muntasir Alam, Country Manager for MJL (S) PTE. Ltd, sheds light on the state of LPG policies, safety issues, and the way forward in an interview with Energy and Power Editor Mollah Amzad Hossain. What is the status of LPG policies in Bangladesh, and how can they be improved?
The various policies related to LPG are now being combined into a comprehensive framework aimed at closing gaps and offering greater clarity.
This effort is being led by government policymakers.
However, it would be more effective if the private sector had greater involvement in drafting such a policy, since nearly 99% of Bangladesh’s LPG supply comes from private licensees. Developing infrastructure to import and distribute LPG to the last mile also requires joint efforts.
Freight remains the most critical cost component in importing LPG.
Ocean freight could be reduced significantly if imports were made in larger consignments, via VLGC carriers and refrigerated cargo, directly into importers’ jetties.
For this to happen, the river draft at Mongla and Chattogram must be increased.
Similarly, improved expressways and larger highways would allow safer, faster LPG distribution through bulk tankers and trucks carrying packed cylinders.
Globally, the availability of onshore refrigerated LPG terminals, along with sufficient draft for VLGCs, is key to building a cost-effective LPG supply chain.
Bangladesh is yet to build and commission such a terminal.
The country’s annual LPG consumption is now about 1.8 million tonnes.
But alongside this growth, accidents related to LPG are also increasing.
Are operators fulfilling their responsibilities properly?
What measures should be taken to prevent these accidents?
By law, licensees are responsible for LPG safety across the value chain.
However, there is no licensing requirement for entering the retail side of the business.
Anyone can become a retailer, provided they secure an NOC from the Department of Explosives if they plan to store more than 120 kg or 10 cylinders of 12 kg each.
In such an environment, licensees find it nearly impossible to identify, monitor, or guide retailers, let alone enforce safety.
That said, operators themselves are bound by strict safety standards.
Their licenses require periodic renewal, and regulatory bodies conduct physical inspections before granting renewals. What safety measures exist for LPG cylinders and accessories, and what risks persist?
Many believe that cross-filling contributes to accidents. Consumers also complain of poor quality and quantity, while allegations suggest some bulk LPG importers indirectly support illegal traders.
How do you respond?
In a compliant bottling plant, cylinders undergo physical inspections in line with international standards, the LPG policy, and Bangladesh’s Pressure Vessels Act.
Each cylinder is also tested using compact valve-checking machines, and filling units are designed to detect overfilling or underfilling. When such standards are ignored as in illegal cross-filling operations cylinders become accident-prone.
Another weak link is LPG accessories.
Although BSTI has developed standards for items such as hoses, regulators, and stoves, implementation remains patchy. Without quality control in these components, risks remain high. Cross-filling operators often acquire LPG through third parties beyond the control of licensees.
For instance, some individuals transfer LPG from large to small cylinders, even mixing sand or water to match weight.
Others use filling guns at auto-gas stations in broad daylight.
These practices are outside the operators’ control, and enforcement by regulators and law enforcement agencies is essential. Does Bangladesh have too many LPG operators?
Some argue that the number is disproportionately high compared to the market size, creating unhealthy competition. Do you agree?
Yes, the number of operators exceeds the market’s needs.
If you calculate the combined bottling and evacuation capacity, it is far higher than current daily demand, leaving many operators with idle capacity.
Instead of importing LPG in small consignments under limited-term agreements, if we imported the country’s monthly requirement through VLGC carriers into onshore terminals, costs would fall significantly.
The current fragmented import system makes operations less efficient and keeps prices elevated.
Many believe reducing transportation costs, especially in imports, could significantly lower LPG prices. What is the biggest barrier?
The biggest obstacle is infrastructure.
Bangladesh lacks an import terminal with sufficient river draft to handle VLGC cargo.
As a result, imports rely on smaller pressurized vessels carrying 2,500-5,000 tonnes per shipment, which drives up freight costs.
Building a terminal with VLGC-handling capacity is essential to lowering import costs.
The shortage of natural gas has reached a critical stage. LPG use in industries is rising. Can LPG help mitigate Bangladesh’s gas crisis in industries?
Yes, LPG can serve as a bridging solution.
Industries are under immense strain due to declining domestic gas and costly LNG imports. LPG provides a decentralized, reliable energy source that does not require pipelines, making it suitable for small and medium industries, industrial clusters, and export processing zones.
Although costlier than domestic gas, LPG is cleaner than coal or furnace oil and ensures continuity in export-oriented sectors such as textiles. With supportive policies such as fair pricing for industries, tax incentives, and investments in storage and distribution LPG could play a critical role in diversifying energy sources and reducing dependence on LNG.
Some argue that a fixed timeframe should be set to phase out CNG in transport and replace it with LPG. What is your view?
Natural gas and CNG are heavily subsidized. Whether to phase them out depends on the government’s broader energy strategy.
Should such a decision be made, auto-LPG is a ready and viable alternative.
How effective are current regulations in curbing crossfilling and unsafe practices?
LPG policies have improved significantly over the years, and regulators generally support licensees.
However, widespread cross-filling and unsafe practices demand stricter, more proactive enforcement on the ground not only by regulators but also by law enforcement agencies.