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Laugfs questions government gas pricing

22 Jun 2021

  • Says cost is higher than selling price

  • Requests to provide alternative options

By Imsha Iqbal   With the authorities deciding not to increase the price of liquefied petroleum (LG) gas, Laugfs is questioning the pricing method used to arrive at this decision, as the cost of production is higher than the selling price of a gas cylinder. Speaking to The Morning Business, Laugfs Holdings Ltd. Chairman W.K.H. Wegapitiya stated that gas companies are compelled to sell cylinders at a loss due to this decision. “When products are sold below the cost, without any additional financial support, the continuation of that business is not possible,” he said, emphasising that the committee itself needs to present an alternative option if it sticks to not increasing the price. He noted that neither the relevant ministry nor other bodies have communicated their decision to Laugfs. All our attempts to reach Litro Gas Lanka Ltd. proved futile yesterday (21). Meanwhile, Minister of Environment Mahinda Amarweera disclosed yesterday that the Cabinet Subcommittee that was appointed to inquire into the revision of gas prices had convened a meeting yesterday morning and has decided to not to increase the price of LP gas. However, Wegaptiya said that he cannot predict any halting or reduction of the supply of gas cylinders at the moment. During a meeting that was conducted last week with the said subcommittee, Litro Gas had suggested a price increase of Rs. 600 per a domestic gas cylinder while Laugfs Gas proposed a price hike of Rs. 700. Laugfs Gas and Litro Gas, the two retail gas providers of Sri Lanka, have also requested the Consumer Affairs Authority (CAA), on multiple occasions, an increase in retail gas prices, alleging that gas prices in Saudi Arabia have increased from December onwards, putting the domestic gas suppliers into jeopardy under the current pricing of a cylinder. However, Ministry of Trade Secretary Bhadrani Jayawardana told The Morning 7 March: “The pricing committee of CAA is currently studying the increase in gas prices the suppliers have faced. All of the costs that are added from the point of purchasing from Saudi Arabia, including shipping costs, are being factored into this study.” On the other hand, the National Movement for Consumer Rights Protection (NMCRP) levelled allegations against Litro Gas for increasing the price of a gas cylinder by introducing a new product named “Premium Hybrid” and thereby deceiving consumers.


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