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New gas company to hurt Litro, boost Laugfs

20 Sep 2021

  • Govt. SPV to have disproportionate director board
  • Litro to be placed at the mercy of competitor
  • Litro writes to Treasury
By Pamodi Waravita The Treasury Department’s newly formed special purpose vehicle (SPV), Siyolit (Pvt) Ltd., is set to impact the state-run Litro Gas Lanka Ltd. negatively whilst boosting the prospects of privately owned Laugfs Gas PLC, by making Litro heavily reliant on Laugfs for its operations, The Morning learnt. High-level officials told us that the current developments would pose a direct threat to the country’s energy security as Litro, which is a strategic investment, would be placed at the “mercy of Laugfs”. The SPV has been formed for the purpose of procuring gas in bulk to both Litro and Laugfs to decrease the cost of procurement and to ultimately provide a cheaper price for the consumer. Whilst Litro owns 75% of its shares, Laugfs holds 24% of its shares, with the Treasury Department owning the remaining 1%. It had been initially decided to form a director board comprising three representatives from Litro and one from Laugfs to reflect the shareholding, and to appoint the Chairman of Litro as the Chief Executive Officer (CEO) of Siyolit. However, this composition had later been changed to include two representatives from Laugfs instead of one. Furthermore, it had been decided to appoint an independent CEO and not the Chairman of Litro. “Interested parties have called to question the intentions and integrity of recently formed liquefied petroleum gas (LPG)-buying firm Siyolit (Pvt.) Ltd. headed by Susantha Silva. It has been observed that the directorate of this firm is lopsided with two directors being allocated to Laugfs which has a 20% market share, while Litro, with over 80% market share, only being allocated three directors,” a press release by the Litro Surakeeme National Unity said last Friday (17). A letter has been sent to the Treasury Department by Litro, requesting an explanation for this disproportionate representation in the newly formed SPV’s director board, where Litro, despite owning majority shares, has only three seats whilst Laugfs has two. However, when The Morning contacted Treasury Secretary S.R. Attygalle yesterday (19) regarding the matter, he said that he has not been informed of any concerns. Furthermore, it has been proposed to utilise the terminals owned by Laugfs at the Hambantota International Port to store the cargo which will be jointly procured by Litro and Laugfs. “Further, Siyolit (Pvt.) Ltd. insists on buying from Litro only via Laugfs’ bunkering facility which necessitates transporting LPG from Litro’s facility in Kerawalapitiya to Hambantota by sea. Litro is compelled to obtain the necessary infrastructure for this process from Laugfs at an additional cost,” alleged the Litro Surakeeme National Unity. The Litro Surakeeme National Unity, composed of employees and civil society members, have alleged that these actions could sabotage the profit-making Litro in favour of its competitor. Litro currently holds approximately 70% of the market share whilst Laugfs holds only 30% of it.


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