Bangladesh Bank (BB) has allowed the import of liquefied petroleum gas (LPG) under suppliers’ or buyers’ credit, in a move aimed at easing financing pressure on local importers amid a deepening LPG supply crisis.
The BB issued a circular in this regard yesterday, saying LPG imports would be eligible for usance terms of up to 270 days.
The move comes as residents and restaurants are struggling to cook daily meals amid a worsening gas crisis affecting both pipeline supplies and bottled LPG.
LPG prices have gone up by Tk 350 to Tk 900, depending on the cylinder size, amid limited supply. LPG cylinders are being sold at prices higher than the government-fixed rates, affecting both households and businesses.
BB said LPG is imported in bulk and later bottled in cylinders for domestic use, a process that requires additional time for storage, bottling, and other operational activities.
Considering this operational reality, the central bank said LPG should be treated as an industrial raw material for trade credit.
Under existing foreign exchange regulations, imports of industrial raw materials are permissible under suppliers’ or buyers’ credit for a usance period of up to 270 days, or the cash conversion cycle, whichever is earlier.
In addition to suppliers’ credit, BB advised banks to arrange buyers’ credit facilities from overseas banks and financial institutions.
Banks may also facilitate bill discounting through offshore banking units of scheduled banks in Bangladesh, subject to compliance with prevailing foreign exchange regulations and prudential credit norms.
The move is expected to provide greater flexibility to LPG importers, helping them better manage cash flows amid rising import costs and tight liquidity conditions.
