In a strategic move to stabilize the domestic energy market, Bangladesh Bank has eased import regulations for Liquefied Petroleum Gas (LPG), allowing importers to utilize credit facilities for up to 270 days.

By reclassifying LPG as an industrial raw material, the central bank’s new circular permits businesses to import the commodity under deferred payment terms through suppliers’ or buyers’ credit.

This policy shift is specifically designed to alleviate dollar liquidity pressure on importers and ensure a consistent supply chain for a product that requires significant time for bulk storage, bottling, and nationwide distribution.

The intervention comes as Bangladesh grapples with an acute LPG shortage that has paralyzed households and businesses for over two weeks.

Retail prices have spiraled out of control, with the standard 12kg cylinder—officially capped at BDT 1,300—frequently selling for as much as BDT 2,500 in various parts of the country.

Similarly, the price of 35kg cylinders has surged to BDT 5,000 nearly BDT 1,800 above the regulated rate.

This supply crunch has been attributed to a combination of factors, including a global shortage of shipping vessels, complications in opening letters of credit (LCs), and the temporary closure of several major LPG plants.

Industry insiders and the LPG Operators Association of Bangladesh (LOAB) have welcomed the central bank’s decision, noting that the extended 270-day usance period will significantly improve cash flow and encourage faster procurement.

Furthermore, the government is considering additional measures, such as reducing the VAT on LPG imports from 15% to 10% and conducting mobile courts to prevent the "artificial crisis" created by overcharging retailers.

With these financial facilities and increased regulatory oversight, officials expect the LPG market to begin normalizing within the next two weeks.