Bangladesh’s liquefied petroleum gas (LPG) market is reeling under a deepening crisis, with cylinders disappearing from retail outlets and prices climbing far beyond the rates fixed by the regulator. Although the government maintains that the situation is temporary and that overall stocks are sufficient, importers point to LC complications, shipping disruptions and international sanctions as the main reasons behind the supply crunch. At the consumer end, however, frustration is mounting, with many alleging that dealers and retailers are exploiting the shortage to make quick profits. This report is the first instalment of a three-part series on the country’s gas crisis.
International sanctions on several LPG-carrying vessels arriving from the Middle East have created major disruptions in supply, with some ships bound for Bangladesh also affected. Added to this are complications related to letters of credit (LCs). Together, these factors have triggered a temporary LPG shortage in the domestic market. As imports have declined, gaps have emerged across the supply chain. Taking advantage of the situation, some dealers and retailers are allegedly fanning the crisis further.
As a result, consumers are being forced to pay up to Tk 1,000 more than the government-fixed price for a 12kg LPG cylinder. In some areas, cylinders are unavailable even at inflated prices. This has pushed users into severe hardship. There are allegations that a section of dealers has amassed huge profits overnight by exploiting the temporary shortage. While many are aware of these practices, no one has so far agreed to speak on record
Sanctions, LC complications disrupt imports
Industry insiders say the immediate roots of the crisis lie in Bangladesh’s heavy dependence on imported LPG, mainly from the Middle East. Recent sanctions imposed by the United States on entities involved in transporting oil and LPG from Iran have affected several ships that previously supplied Bangladesh. Some of these vessels were regularly used for shipments to Chattogram, creating sudden gaps in supply.
Alongside this, LC-related complications have intensified. Banking constraints and financial uncertainty following political changes have made it difficult for several large operators to open LCs on time. Even where LCs were opened, importers struggled to secure vessels due to sanctions-related restrictions.
Former Chattogram Chamber of Commerce and Industry director Mahfuzul Haque, who is also involved in the LPG business, said, “The country has been facing an LPG crisis for more than a month. Our main source of LPG is the Middle East. Several ships that used to carry LPG to Bangladesh have now been hit by the recent ban imposed by America.”
He added, “Despite opening LCs, many importers could not bring LPG on time because of the ship crisis. Big importers like Bashundhara, Beximco and Unigas have not been able to import LPG due to LC complications.”
Reduced supply, rising demand
The import slowdown has tightened the supply chain at a time when demand typically rises. LPG consumption increases during winter as households rely more on gas for cooking, while production in the Middle East often dips due to seasonal factors.
Ekramul Haque Jewel, Area Head of Sun Gas Limited, said this year’s winter pressure has been compounded by financial constraints. “Every year, some level of LPG crisis arises in winter,” he said. “But this time the picture is a little different. Due to political change, many companies are facing banking complications. As a result, some companies have not been able to import LPG.”
He noted that overall supply has fallen sharply. “The supply of almost every company in December decreased by about 20 per cent compared to the previous year,” he said.
A dealer, requesting anonymity, said another blow came from the halt of Iranian LPG supplies that previously entered Bangladesh through private channels. “A company called Slogal Energy used to supply Iranian gas. In November, America imposed sanctions on Slogal Energy. Since then, that supply has stopped, creating a sudden crisis,” he said.
Prices spiral beyond official rates
The impact of the supply squeeze is being felt most acutely by consumers. According to the Bangladesh Energy Regulatory Commission (BERC), the price of a 12-kg LPG cylinder for January has been fixed at Tk 1,306, up from Tk 1,253 in December. In reality, consumers report paying hundreds of taka more – or being unable to find cylinders at any price.
In Chattogram’s Kazir Deuri area, tea stall owner Alauddin described how prices jumped within days. “Last week I bought a 12-kg cylinder for Tk 1,800. On Sunday, I had to buy the same cylinder for Tk 2,200,” he told Jago News.
The situation is no better in Battery Goli. Tea shop owner Md Siraj said his business has ground to a halt. “My shop has run out of gas. I had to bring the cylinder from my home to the shop,” he said. “I cannot get gas even by calling the person from whom I used to buy gas. I cannot get gas even for Tk 2,000 in the market.”
Restaurant owners say they are struggling to stay open. Md Akbar, owner of Dastagir Restaurant on Momin Road, said the crisis has forced him to change how he operates. “For the past 15 days, we have been buying gas at a higher price,” he said. “We used to buy 22-kg cylinders. Now we are buying 12-kg cylinders – and that too at almost double the price.”
Household consumers are also feeling the pinch. Iqbal Hossain, a resident of Lalkhan Bazar, described rapid price changes at the same shop. “I bought a 12-kg cylinder from the shop in front of Mamata Clinic around 11am about 12 days ago for Tk 1,350,” he said. “When I went back to the same shop after Maghrib, I had to buy it for Tk 1,550. Now the price is much higher.”
Retailers, meanwhile, claim they are empty-handed. One shopkeeper said, “Our company is not providing gas. Even though there are customers, I cannot sell. I am sitting with empty cylinders.”
Are dealers ‘adding fuel’?
While bottling companies insist they are selling LPG at BERC-approved rates, allegations persist that dealers and retailers are driving up prices at the last mile.
Mahfuzul Haque said, “Those who have bottling plants are supplying LPG cylinders at the government-set price. No one is charging more at the bottling stage. But taking advantage of the supply shortage, dealers and retailers have increased prices.”
Some dealers reject accusations of syndication but admit that market dynamics have changed. One dealer said, “Earlier, some distributors would get two truckloads of gas quickly. Now it takes three to four days to get one truck. As prices rise, dealers are trying to fill all their empty cylinders. This is increasing demand more than usual.”
Dealers and companies blame supply gaps
At the retail level, many dealers say they simply have no stock. Md Russell, a Beximco dealer in Chattogram’s Baklia area, told Jago News, “We do not have any supply from the company. As a result, we are not able to sell. When we had gas, we sold it for 1,370 to 1,400 taka. Now there is no supply, so we can’t sell.”
Sajjad, a dealer of BM LP Gas in the New Market area, echoed the frustration. “Even though customers constantly bother us, we have nothing to do,” he said. “Due to the lack of supply from the company, we are unable to meet the needs of the common people.”
BM LP Gas Managing Director Mohammad Mujibur Rahman said the bottleneck lies at the import stage. “We signed the LC a month ago,” he said. “Despite demand, it is not possible to supply LP gas as it has not arrived at the port.”
Responding to allegations of syndication, he said, “We do not have any syndicate. Such information is false. If we get supply, we will supply it to customers.”
Market concentration and import data
According to Bangladesh Petroleum Corporation (BPC) and LPG Operators of Bangladesh (LOAB), 34 companies operate in the LPG sector, with 23 licensed to import LPG. However, only 10 companies imported LPG last December. Others – including major players such as Bashundhara, Beximco, Unigas, Orion, G-Gas and Navana – failed to open LCs due to banking complications.
National Board of Revenue (NBR) data show that LPG imports fell year-on-year in 2025 despite growing demand. While 1.61 million tonnes were imported in 2024, imports dropped to about 1.47 million tonnes in 2025. Although December 2025 imports were higher than December 2024, the overall annual shortfall has strained supply.
Regulatory price vs market reality
BERC raised LPG prices for January by Tk 53 for a 12-kg cylinder, setting the new rate at Tk 1,306. Including VAT, private LPG now costs Tk 108.83 per kg, up Tk 4.42 from December. Yet consumers say enforcement is weak.
The Consumer Association of Bangladesh (CAB) has blamed regulatory failure for allowing overpricing. CAB Chattogram divisional president SM Nazer Hossain said, “After fixing LPG prices, the Energy Regulatory Commission said it is difficult for them to control prices at the retail level. Unscrupulous traders are taking advantage of this.”
Government and regulator: ‘Temporary crisis’
Bangladesh Energy Regulatory Commission member (Gas) Md Mizanur Rahman insisted there is sufficient LPG in the country. “Demand rises in winter, and there is also a shortage of ships due to the recent ban by the American Treasury Department,” he said. “This problem is temporary.”
He added, “There is enough LPG in the market to meet current demand. At the consumer level, campaigns have been started against those charging extra. Hopefully, the crisis will end soon.”
Power, Energy and Mineral Resources Adviser Fouzul Kabir Khan acknowledged the private sector’s dominance. “Ninety-eight per cent of LPG – import, storage and marketing – is in the private sector. The government has only two per cent,” he said, noting that government production at Eastern Refinery is currently shut for maintenance.
The adviser said additional LPG imports are under way. “The process started a day or two ago, and it will take about a week for the additional LPG to arrive,” he said.
Looking beyond the immediate crisis, he added, “Thinking about the future, we are considering a larger government role in LPG. We are thinking of importing LPG through government-to-government (G2G) arrangements so that the private sector cannot monopolise the market and a balance can be maintained.”
As the crisis drags on, consumers remain caught between official assurances and market realities – empty shops, soaring prices and no clear end in sight.