Challenges of LPG Supply, Distribution & Pricing in Growing Market: Bangladesh Case Study

Abstract

The prime energy scarcity is nowadays a mostly the debated issue in Bangladesh in the awaken of spreading energy and fuel crisis. Pipeline natural gas support only 6 % domestic consumption of total population by 16 % of total produced gas which is declined mode. The claim of natural gas is on the continuous increase to meet domestic needs in the city, suburban areas together with industrial, commercial, power generation and diverse usage against the scarcity of gas. The demand for natural gas is on the continuous increase to meet domestic needs in the urban, suburban areas alongside industrial, commercial, power generation and diverse usage against the scarcity of gas. In this situation, LPG becomes a popular alternative energy source to reduce the natural gas crisis along with providing clean fuel in rustic areas. LPG is using by about 81% in its total amount for domestic purposes. At present in 2018 LPG demand in Bangladesh is approximate 750,000 MT and in future 2025 it would be 250, 0000 MT with growth rate 25%, 17 %, 14%, 15 %, 8%, 20% and 17% respectively. Now a day 12 KG LPG cylinders price is BDT 1150-1200 because of the variety of market barriers, government VAT and higher transaction costs which is not affordable for the middle as well as a low-income family though Bangladesh government fixed the price every month. LPG could assume an increasingly significant job in giving cooking energy to low-middle pay family units in Bangladesh if an appropriate advertising structure and circulation plan are masterminded. The aim of this project is to find out the challenges of LPG supply, distribution, and pricing in the growing Bangladesh market and to make a well planned and details road map so that LPG companies of Bangladesh can serve 70% of the domestic cooking fuel through LPG by 2025.