The proposed increase in VAT on LPG cylinders from 7.5% to 10% in the government’s 2025–2026 budget poses a serious threat to national energy security, the LPG Operators Association of Bangladesh (LOAB) said in a statement on Wednesday.

In the statement signed by the association’s president, Mohammad Amirul Haque, it was noted that the country’s natural gas reserves 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. Currently, the private sector imports over 1.5 million tonnes of LPG annually, 97% of which is used for cooking. This is equivalent to approximately 2 MMcfd of natural gas and meets the needs of nearly 4 million households. The use of LPG has also helped reduce deforestation in rural areas by serving as a cleaner alternative to traditional fossil fuels.

The statement warned that an increase in VAT would significantly raise the price of cylinders, severely impacting low-income groups and discouraging the use of clean energy. More than 40 million LPG cylinders are currently in use across the country, with demand increasing every year. The proposed tax hike could jeopardize both the affordability and accessibility of this essential fuel for the general population.

LOAB urged the government to reconsider the proposed VAT increase in the interest of national energy security, environmental protection, and public welfare.