Bangladesh has reduced value-added tax (VAT) rates on domestically-produced LPG cylinders, potentially boosting demand for the fuel.
VAT has been cut to 5pc from 15pc, an official from state-owned oil firm Petrobangla said. The tax cut expires in June next year. Bangladesh only introduced the tax on cylinders last year, in a move some market participants feared could stall growth in demand for LPG.
Bangladesh has the capacity to produce 8.5mn cylinders a year. The country's LPG demand has surged in recent years, exceeding 900,000t in 2019 from just under 100,000t in 2015, Argus Analytics data show. Demand is expected to exceed 1.1mn t this year, despite the Covid-19 outbreak and a government-enforced lockdown, according to local LPG distributor Omera.
