Dhaka: Bangladesh government is working to formulate a policy to facilitate private investment in the country's LPG and auto gas sector as part of its plan to popularise the use of LPG and auto gas amid fast depletion of country’s natural gas reserve.

The issue of fixing the maximum retail price (MRP) for LPG and auto gas is learnt to be left out of the proposed policy.

According to official sources, a high-level committee of the Energy Division has been working on it and finalised a draft-policy. Recently, it placed its final draft for approval of the State Minister for Power and Energy Nasrul Hamid.

Contacted State Minister for Power and Energy Nasrul Hamid said he has already gone through the draft-policy and instructed the officials concerned to bring some changes to the draft policy to make it more private-sector friendly.

"After my discussion with private sector investors, I've have given my notes on some key issues of the draft policy and instructed the officials to incorporate those in the final copy," he told UNB without giving any detail of his instructions.

He, however, said his ministry will formulate a separate policy to address the issue of pricing of LPG and auto gas. 

The draft policy was proposed to be named as "Liquefied petroleum gas (LPG) import, production, preservation, terminal construction, plant set-up, and auto-gas refuelling station set-up, operation, distribution and marketing policy."

Energy expert and Professor of Bangladesh University of Engineering and Technology (BUET) M. Tamim welcomed the move of the government.

He suggested ensuring a 10 percent market share by the government entities in LPG and auto gas market to resist the any foul-play or monopoly by private sector in fixing the prices of the products.

Officials said LPG and auto gas are the same products. When it comes to household use it is termed as LPG and when it comes to the use in motor vehicles, it is mentioned as Auto-Gas. 

Many investors in private sector have lined up with huge interest to invest in the new field of the energy sector.

As per the draft policy, if any individual or a company wants to set up any bulk LPG plant, it must have a 3000 metric tons storage capacity.

The second key point of the policy is that the investor has to start a process of investment within a year of getting permission and complete installation of plant within next 2 years. Otherwise, the permission will be automatically cancelled.

However, the initial permission will be non-transferable. But after setting up the plant, the licence could be transferred to third party.

Sources said the non-transferable provision was incorporated to check the current practice of a certain quarter to receive licence through persuasion and then selling out to other.

Initially, the storage capacity was fixed at 5000 mt and plant set-up tenure was 2 years.

"But at the request of the aspirant investors, the issue of capacity and tenure was little bit relaxed," said a deputy secretary of the Energy Division.