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Price-drop anticipation  created LPG shortage, Litro says amid complaints

31 Oct 2022

By Safrah Fazal While Liquified Petroleum Gas (LPG) consumers have been complaining of an LPG shortage and many dealers within Colombo District have been claiming that they have not received stocks of LPG from distributors, Litro Gas Lanka (Ltd.) clarified that sufficient stocks were available, and that distributors may be hesitant in procuring stocks in anticipation of a price reduction this week. Speaking to The Morning yesterday (30), several dealers within the Colombo district said that they had not been receiving stocks of Litro LPG cylinders over the past week. “We have no stocks of Litro LPG at the moment. We have been receiving fewer stocks than what we ordered over the past two weeks. We have not been receiving the 5 kg line of cylinders. We were told that the distributors would provide us with the 12.5 kg cylinders yesterday [30], but until we receive these stocks, we cannot be certain,” a dealer in Colombo 9 said. Dealers in areas including Colombo 5, Colombo 15, Battaramulla, and Homagama also complained of having to turn customers away due to a lack of LPG stocks over the past four to seven days. “The country must have run out of LPG stocks,” a dealer opined, whilst another opined that the distributors, who purchased LPG stocks from Litro Gas Lanka, did wish to procure sufficient stocks due to a price reduction in Litro LPG cylinders that is expected this week. “The distributors aren’t buying sufficient stocks because they are afraid that they will have to purchase at a higher rate and sell at a lower rate if the prices are slashed this week. We might have enough stocks from 5 November onwards, when the prices for November will be announced.” It was reported last week (24) that Litro will be reducing prices of LPG by the first week of November as it had settled a sum of Rs 7.5 billion owedto the Treasury. Speaking to The Morning yesterday, Litro Gas Lanka Chairman Muditha Peiris stated that a shortage of Litro LPG in the market was a false claim. “There is no shortage, because we are issuing stocks from Kerawalapitiya. Even now, we are open, and have been issuing since 8 a.m. everyday. At present, we have a full ship of 3,700 metric tonnes (MT) of LPG. Anyone who visits the place will be able to observe the full operation at Kerawalapitiya.” He further noted that the shortage may have been created with distributors being under the impression that a price reduction will be announced during the first week of November. “They are not purchasing as they are under the impression that the price will go down [in November] and hence are not purchasing at a higher rate. Anticipating a price reduction, they are reluctant to take goods in full. They are taking stocks on a daily basis. Because if they have more stocks, they might make a loss if prices are reduced. We are not certain if prices will go down yet. We are yet to see that on 2 November.” Pertaining to the Litro’s announcement on 24 October about prices being slashed in November, Peiris said: “We didn’t say that we will reduce for sure, all we said was that we see a downtrend. The media had been asking what the trend is and we said it was a downward trend. However, it cannot be predicted right now, because it keeps fluctuating. The trend was down and we predict that we might go for a price reduction again.” When The Morning also queried on the progress of the term tender for 280,000 MT of LPG that could last till early 2024, Peiris noted that the evaluation was at its final stages and will hopefully be awarded by the end of next week.  “By the latter part of next week we should be able to finalise everything and award the tender. We also have to give time to the supplier to make arrangements with their logistics. Until then, we will have sufficient stocks. We have sufficient stocks until December.”


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