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The government is set to launch a pilot programme in November offering subsidised liquefied petroleum gas (LPG) to one lakh low-income families through a dedicated LPG card scheme.
Under the proposal, selected households will be eligible to purchase a 12kg LPG cylinder every three months at a fixed rate of Tk1,000, irrespective of prevailing market fluctuations.
The initiative – yielding up to four subsidised cylinders a year per family – aims to cushion poor rural households against relentless cost-of-living pressures while driving a transition towards cleaner cooking fuels.
However, accurately identifying genuine beneficiaries and securing a stable supply of state-imported LPG present formidable hurdles.
The Energy and Mineral Resources Division is currently collaborating with line ministries to firm up beneficiary criteria, distribution networks, and supply chains.
A formal summary of the project is also being prepared for submission to the Prime Minister’s Office.
Highlighting the imperative of rigorous targeting, Dr Mustafa K Mujeri, former chief economist of Bangladesh Bank, noted that the initiative could offer meaningful relief provided it reaches those most in need.
“If the support reaches households genuinely in distress, it will yield clear social benefits and ease immediate budget pressures,” Dr Mujeri told the Daily Sun.
“With employment opportunities shrinking and several commercial enterprises shuttering, assisting low-income households with essential domestic fuel costs is a timely step.”
He stressed, however, that preventing leakages and ensuring the support reaches only target groups remains the core test.
Inflationary squeeze
The intervention comes as households continue to grapple with persistent inflationary stress.
Official figures from the Bangladesh Bureau of Statistics (BBS) put overall inflation at 8.26% in August, with food inflation at 7.02% and non-food inflation climbing to 9.32%.
With wage growth lagging slightly behind at 8.05%, real purchasing power remains severely eroded.
To avoid bureaucratic overlap, the government plans to select LPG cardholders from existing lists compiled for the Social Welfare Ministry’s Family Card programme.
Field-level workers are already gathering field data, and the Energy Division is preparing a draft policy alongside a memorandum of understanding (MoU) with the Social Welfare Ministry.
Energy expert Prof Ijaz Hossain welcomed the move, noting that soaring LPG prices have placed clean fuel out of reach for many.
“High fuel costs swallow a disproportionate share of poor households’ disposable income,” Prof Ijaz said.
While rural households often resort to traditional biomass like firewood or cow dung, he pointed out that urban slum dwellers have no such alternatives, making affordable LPG vital for city-dwelling poor families.
He added that Bangladesh must systematically transition away from domestic piped gas as national reserves deplete.
“Residential users account for roughly 11% of national gas consumption, but nearly half is lost to systemic misuse. Transitioning households to subsidised LPG is both economically necessary and sustainable,” he noted, citing India’s successful expansion of LPG access via its Aadhaar-linked system.
Supply and import bottlenecks
Securing a reliable state supply remains an uphill task in a market overwhelmingly dominated by private entities, which currently control 98.67% of distribution compared to the government’s nominal 1.33% share.
State efforts to import LPG directly hit early turbulence. After failing to secure competitive bids through an initial request for quotation, the government pivoted to direct procurement. Speed Marketing Corporation (Speed Group) was issued a Notification of Award on 13 August, but failed to furnish the mandatory performance guarantee, stalling the process.
Authorities are now evaluating a direct purchase proposal from Brother Liquefied Petroleum Gas Ltd and seeking legal counsel on collecting an initial security deposit during negotiations.
To bridge short-term logistics gaps, the Bangladesh Petroleum Corporation (BPC) signed a three-month agreement on 6 August to utilise a private operator’s 10,000-tonne storage capacity for storing, bottling, and distributing state-imported LPG.
In the longer term, the government plans to bolster its market footprint by establishing dedicated infrastructure, including a land-based LPG plant at South Kattali in Chattogram, alongside storage and bottling units in Teknaf and Mongla.
Ultimately, the viability of the LPG card scheme hinges on two crucial elements: watertight beneficiary targeting and a uninterrupted supply of fuel at the promised concessionary rate.