Dhaka, June 2 -- The government has extended the VAT exemption on liquefied petroleum gas (LPG) cylinders until June 2027, but a VAT hike at the local production level could lead to higher prices, piling pressure on household budgets.

Finance Advisor Salehuddin Ahmed announced the proposal on Monday while unveiling the Tk 7.9 trillion national budget for the 2025-26 fiscal year.

According to the budget proposal, the VAT exemption on LPG cylinders made of iron and steel at the local production level has been adjusted. Instead of the existing 7.5 percent exemption, a 10 percent VAT will now apply until Jun 30, 2027.

The change could drive up cylinder prices.

However, in a separate move, the Bangladesh Energy Regulatory Commission (BERC)...