BB relaxes payment terms for LPG imports

Bangladesh Bank (BB) has relaxed import conditions for liquefied petroleum gas (LPG) by allowing importers to use credit facilities of up to 270 days. The step BB has taken is aimed at reducing pressure on dollar liquidity and stabilising domestic LPG supplies.

Under the new policy, LPG will now be treated as an industrial raw material, enabling importers to import LPG on deferred payment terms through suppliers’ credit or buyers’ credit for a maximum of 270 days.

The decision was announced in a circular issued on Monday by the central bank’s Foreign Exchange Policy Department to all scheduled banks.

The central bank noted that LPG is largely imported in bulk and later bottled for retail distribution. Given the multiple stages involved—storage, bottling and marketing—BB said it was appropriate to classify LPG as an industrial input.

Earlier, a circular issued on 29 December allowed a 270-day usance period for industrial raw material imports. The latest move extends the same benefit to LPG importers.

Besides, importers will be allowed to obtain buyers’ credit from foreign banks or financial institutions and access bill discounting facilities through offshore banking units (OBUs) of local banks.

BB said the extended credit facility would help improve cash flow for importers and facilitate faster imports of the essential fuel, which requires a longer turnaround time after arrival.

The move comes as the country faces an acute LPG supply shortage that has lasted for more than two weeks, pushing prices sharply higher.

In several areas, a 12kg LPG cylinder—officially priced at Tk1,300—is selling for as much as Tk2,500, while the price of a 35kg cylinder has climbed to around Tk5,000, compared to the regulated rate of Tk3,200.

Traders blamed the supply disruption on a shortage of vessels, difficulties in opening letters of credit, and temporary shutdowns at several LPG plants.

Industry insiders expressed hope that the extended credit facility would help ease import constraints and bring stability back to the LPG market in the coming days.