LPG market heats up

Seeing the bright prospects of the liquefied petroleum gas (LPG) market, entrepreneurs are increasingly expanding their capacities in preparation.

The latest to join the competition is Omera Petroleum, a subsidiary of MJL Bangladesh, with its countrywide distribution channel and different product sizes.

The company launched its LPG cylinders, which come in three different sizes of 5.5kg, 12kg and 35kg, in the local market on April 22.

“No other producer in the market offers a 5.5kg cylinder,” said Ishtiaq Ahmed, chief executive officer of Omera Petroleum, adding that four bottling and storage plants at different strategic locations will give the company an edge over other players.

The company's four bottling plants are located in Mongla, Ghorashal, Bogra and Mirsarai. The cylinder manufacturing plant, which has an annual production capacity of five lakh cylinders, is located in Habiganj.

MJL has invested Tk 600 crore to set up the five plants. The company, which is aiming to grab a 7 percent market share in the first year of its operation, has also built an LPG carrying barge at a cost of Tk 30 crore for smooth distribution of the cooking gas and cylinders through river routes.

Omera Petroleum is also keen on supplying LPG for automobiles, which now run on compressed natural gas (CNG), diesel, petrol or octane.

At present, around 1.1 lakh tonnes of LPG are sold a year and the market is growing by 10 percent.

But the consolidated capacity of all the seven operators stands at over five lakh tonnes a year, including Omera Petroleum's one lakh tonnes.

Some other players -- Orion Group, Index, Senakalyan and Bangladesh Petroleum Corporation in Mongla and BM Energy in Chittagong -- will hit the market in the next two years, sensing that the natural gas used by households will be depleted by the next 10-15 years.

Presently, Bashundhara, Total, Jamuna and Cleanheat each have production capacity of one lakh tonnes, with Omera now joining them. Only Bashundhara and Jamuna make their own LPG cylinders, while the others import them.