VAT Hike on Cylinders Could Cripple Clean Energy Shift, Warns LPG Association
The LPG Operators Association of Bangladesh (LOAB) has raised serious concerns over the government’s proposed increase in VAT on LPG cylinders from 7.5% to 10% in the 2025–2026 national budget. The organization warns that the move could pose a significant threat to national energy security and disproportionately affect low-income households.
In a post-budget reaction on Wednesday, June 4, LOAB President Amirul Haque said, “Natural gas reserves in the country are depleting rapidly, and the government has already halted new household gas connections. In this context, LPG remains the only viable alternative fuel for millions of households.”
He added, “An increase in VAT will significantly raise the price of LPG cylinders, severely impacting low-income consumers and discouraging the use of clean energy. Currently, more than 40 million LPG cylinders are in use across the country, and demand continues to grow every year. The proposed tax hike will jeopardize the accessibility and affordability of this essential energy source for the general public.”
The association has urged the government to reconsider and withdraw the proposed VAT increase in view of national energy security, environmental preservation, and public welfare.
LOAB further noted that the private sector currently imports more than 1.5 million tonnes of LPG annually, with 97% of it used for cooking purposes. This volume is equivalent to approximately 2 MMCFD of natural gas, catering to the energy needs of around 4 million households. The widespread use of LPG has also contributed to a reduction in deforestation by replacing traditional biomass fuels in rural areas.
