Arya News - Middle East disruption drives sourcing shift, raises import costs, exposes nearly 10 million consumers to price and supply risks.
DHAKA – Bangladesh’s dependence on US-based firms for liquefied petroleum gas (LPG) imports has surged amid the US-Israel war on Iran, leaving the South Asian country exposed to supply disruptions and price volatility.
The shift has forced importers to seek supplies from farther afield, and rely more heavily on spot-market purchases, and pay higher procurement premiums, freight and insurance costs.
With nearly one crore consumers relying on LPG, largely for household cooking, these costs are feeding into domestic prices.
The US firms accounted for 85 percent of Bangladesh’s LPG imports in September this year, up from 27.4 percent a year earlier, according to Bangladesh Energy Regulatory Commission (BERC) data.
Imports from traditional Middle Eastern suppliers, including Oman, Iraq, Saudi Arabia and the United Arab Emirates, fell to zero in September.
Oman and Iraq accounted for 41 percent and 21 percent of imports respectively in September 2025.
Besides the United States, smaller quantities came from the Republic of the Congo and the Democratic Republic of the Congo, which together accounted for 12 percent of imports. Malaysia’s share declined from 5 percent to 3 percent.
Ajam J Chowdhury, director of Omera Petroleum Limited and former president of the LPG Operators Association of Bangladesh (LOAB), said freight charges for bringing LPG directly from the United States stood at around $82 per tonne before the Middle East crisis, but some vessel owners were now demanding as much as $250 per tonne.
Mohammed Nurul Alam, chief executive officer of JMI LPG, said his company had imported around 8,000 tonnes of LPG and paid a premium of $300–350 per tonne over the Saudi Contract Price to secure supplies.
“We were selling the product at a loss to maintain supplies,” he said.
He said the conflict had reduced vessel availability and made it difficult to arrange shipments and secure insurance coverage, adding to the cost of bringing LPG to Bangladesh.
FEW ALTERNATIVES
Ajam warned that Bangladesh’s growing dependence on US-origin LPG posed a supply-security risk, as importers had limited alternatives.
Although countries such as Nigeria and Algeria could emerge as alternative suppliers, Bangladeshi importers had little experience sourcing LPG from those markets, he said.
Another feature of the changing supply chain is the growing role of intermediary storage and trading hubs in Asia.
US-origin cargoes are sometimes stored and traded through facilities in Vietnam, South Korea, Japan, and China before reaching Bangladesh, Ajam said.
He added that large importing countries, including India, had already secured cargoes for the next three to four years, making it difficult for smaller buyers to secure supplies.
“Even if the war ends, supplies may not return to normal immediately, as the damaged infrastructure in the Middle East would take time to repair,” he said.
Md Redhwanur Rahman, chief operating officer (sales and marketing) of Bashundhara LP Gas, which was once a major market player but is currently unable to import, said, “Even companies with term supply contracts were not receiving their full contracted volumes because of shipping constraints.”
The company had faced banking restrictions in 2024 and 2025 and had yet to sign a new long-term supply contract with any global supplier, he added.
BERC Chairman Jalal Ahmed said the shift towards US supplies had increased the distance LPG cargoes needed to travel to reach Bangladesh, adding to transportation time and costs.
CONCENTRATED IMPORT MARKET
Although around 35 companies hold licences to operate in the sector, only 10 to 12 are active importers.
The five largest importers accounted for around 71 percent of Bangladesh’s total LPG imports of 17.43 lakh tonnes in FY2025-26, according to BERC data.
United Aygaz was the largest importer, bringing in 2.96 lakh tonnes, followed by Meghna Group’s Fresh LPG with 2.8 lakh tonnes.
Omera imported 2.65 lakh tonnes, BM Energy 2.03 lakh tonnes and Jamuna Spacetech 1.87 lakh tonnes.
Several other major companies, including Basundhara, Unitex, Orion, Beximco and JMI, have reduced or suspended imports, according to industry sources.