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Laugfs unimpressed by permitted price hike

13 Aug 2021

  • Chairman Wegapitiya claims hikes inadequate
  • Noncommittal on continued supply
  • Litro prices to remain unchanged
BY Buddhika Samaraweera Even though the Consumer Affairs Authority (CAA) yesterday (12) granted permission to Laugfs Gas PLC to increase the price of Laugfs liquefied petroleum gas (LPG), Laugfs Gas PLC Chairman W.K.H. Wegapitiya was not satisfied with the price increases. When contacted by The Morning, he said that it is not sufficient to increase the price of 12.5 kg and 5 kg gas cylinders by Rs. 363 and Rs. 145, respectively, given the prevailing gas prices in the world market. He further said that no written notification, as of last afternoon, has been received from the CAA regarding the permission given to increase prices. “We have not yet been notified in writing in this regard. This increase should have been allowed about six months ago. However, the Government waited for a gas shortage and then only it allowed a price increase,” he noted. When questioned as to whether it will now be possible to supply gas without any shortage following the permission to increase gas prices, Wegapitiya noted that nothing could be stated in that regard at the moment. “Suppose a hungry person wants a loaf of bread, but he is given only half a loaf of bread; is he satisfied with that?” he queried. The CAA yesterday granted permission to Laugfs Gas PLC to increase the price of a 12.5 kilo (kg) gas cylinder by Rs. 363 from Rs. 1,493. Therefore, the new price of a 12.5 kg Laugfs Gas cylinder is Rs. 1,856. In addition, the price of a 5 kg Laugfs Gas cylinder has been increased by Rs. 145. Hence, the new price of a 5 kg Laugfs Gas cylinder which was Rs. 598, is Rs. 743. This was after Laugfs Gas PLC reduced its supply of gas due to a number of factors, including the Government’s refusal to comply with requests made by the said company to increase gas prices in accordance with the prices of the world market. People were seen subsequently complaining that there is a shortage of gas in the market with long queues forming outside LPG retailers. Meanwhile, Co-operative Services, Marketing Development, and Consumer Protection State Minister Lasantha Alagiyawanna yesterday (12) told the media that there would be no revision in the prices of the LPG cylinders of the state-owned Litro Gas Lanka Ltd. (LGLL) despite a Laugfs price hike. In this backdrop, the Co-operative Services, Marketing Development, and Consumer Protection State Ministry recently stated that it would work with President Gotabaya Rajapaksa, the Cabinet of Ministers, the Finance Ministry, and the Trade Ministry to address the current shortage of Laugfs Gas in the country. Alagiyawanna stated this in response to a letter sent by government parliamentarian Mohomad Muzammil regarding the prevailing Laugfs Gas PLC LPG shortage in the country. Alagiyawanna had claimed that the current gas shortage was not the fault of the CAA, as claimed by Muzammil, and that all necessary steps have been taken by the CAA in this regard. He further stated that since the start of this issue, action has been taken to amend the CAA Act in order to initiate certain legal actions with regard to the matter. In the letter sent to Alagiyawanna dated 8 August 2021, Muzammil had noted that Laugfs Gas PLC, which accounts for 20%-25% of the country’s gas market, with about two million regular customers, has stopped releasing gas cylinders to the market. He had also stated that the consumers had been severely inconvenienced as a result and that the CAA, which comes under the purview of the Co-operative Services, Marketing Development and Consumer Protection State Ministry, did not appear to have taken any action against Laugfs Gas PLC. He had also claimed that said company’s decision to stop the supply of a product with a consistent customer base, due to a request made to the Government to increase the price of that product not being approved in this manner, is not only unethical but also a legal offence under the CAA Act, No. 9 of 2003 as amended. The Government, on 10 August, announced that the country has enough gas reserves and that LGLL has the capacity to fulfil the entire gas requirement of the country. Cabinet Co-Spokesman Dr. Ramesh Pathirana said that people should not be worried about any gas shortage and assured that the country has enough gas reserves. He further claimed that the people are unnecessarily worried about the continued availability of the gas supply due to the declaration of bankruptcy by a certain gas-supplying company. The Co-operative Services, Marketing Development and Consumer Protection State Ministry had also instructed LGLL to supply the entire gas requirement of the country. When contacted by The Morning recently, Co-operative Services, Marketing Development, and Consumer Protection State Ministry Secretary K.D.S. Ruwanchandra confirmed the matter and claimed: “LGLL has stated that it can fulfil the entire gas requirement of the country.” Meanwhile, a group including consumer rights activist Asela Sampath and Low Country Estate Labourers’ Union (LCELU) President Ruwan Gallage, had arrived at the CAA office in Colombo on 11 August with empty Laugfs Gas cylinders in protest over the current shortage of Laugfs Gas in the market.


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