Bangladesh Bank has taken a significant step to facilitate the import of Liquefied Petroleum Gas (LPG) by making credit facilities more accessible and transparent for importers. Under a circular issued on Monday, the central bank has extended the maximum buyer’s credit period for LPG imports to 270 days, a provision previously restricted to the import of industrial raw materials.
The circular notes that LPG is typically imported in bulk and later bottled into cylinders for domestic and commercial distribution. This process involves additional time for storage, cylinder filling, transportation, and quality control. Recognising these requirements, Bangladesh Bank has classified LPG imports under the category of industrial raw materials, thus allowing importers to avail commercial credit under extended terms.
This change is expected to alleviate the financial and logistical pressures on businesses, enabling them to streamline the marketing and distribution of LPG more effectively. Importers can now plan their supply chain with greater certainty, reducing delays and optimising inventory management.
According to existing foreign exchange regulations, industrial raw material imports are eligible for supplier or buyer’s credit for up to 270 days. By extending this facility to LPG, Bangladesh Bank is taking a pivotal step towards strengthening the supply of LPG for households, industries, and commercial sectors across the country.
The central bank has instructed commercial banks to assist businesses in obtaining Buyer’s Credit from foreign banks and financial institutions. Additionally, facilities for bill discounting through Offshore Banking Units (OBUs) have been outlined, ensuring that credit processes are expedited and importers can maintain a competitive edge in the international market.
The table below summarises the key features of the revised credit facility for LPG importers:
| Facility Type | Details |
|---|---|
| Maximum Credit Period | Up to 270 days for supplier/buyer’s credit |
| Applicable LPG Type | Bulk imports, subsequently bottled into cylinders |
| Credit Classification | Considered as industrial raw material |
| Financial Assistance | Buyer’s Credit from foreign banks/financial institutions |
| Bill Discounting | Available via Offshore Banking Units |
| Objective | Simplify LPG import, storage, distribution, and marketing |
| Expected Impact | Ensure continuous supply, reduce costs for industry and households |
Bangladesh Bank’s initiative is anticipated to stabilise domestic LPG supply, reduce import costs, and allow businesses to compete effectively in international markets. The move will have a particularly positive impact on households and the industrial sector, ensuring smoother supply chain operations and lowering operational costs.
Overall, the extended credit facility is poised to reduce economic risks for importers, accelerate the LPG supply process, and enhance competitiveness in international trade, ultimately contributing to a more robust energy supply ecosystem in Bangladesh.