Even though the Government maintains that there is no liquefied petroleum gas (LPG) shortage in the country, what the consumers trying to purchase LPG experience is different. During the past few weeks, a lack of LPG was reported from many parts of the country, and even yesterday (11), long queues could be seen in front of gas retailers in some areas including in Colombo.
The discussion about the LPG crisis is not a new one, although the only response the Government has given in this regard is the assurance that there would be no room for a shortage. However, assurances never resolved any problem, and perhaps it is time for the Government to acknowledge the gravity of the situation, without waiting until it worsens to the point where it becomes a national level crisis.
The current LPG crisis first arose when the State-owned gas supplier, Litro Gas Lanka Limited (LGLL) and privately owned Laugfs Gas PLC, each accounting for roughly 70% and 30% of the market share, respectively, requested permission for a price hike, in order to save the industry from continuing losses and possible collapse. The Government’s refusal to grant permission compelled Laugfs Gas PLC to halt operations, stating that as a privately owned firm, they could not survive amidst sustained losses, which is an understandable move. However, Litro Gas is ready to continue its operations. Cabinet Co-Spokesman Dr. Ramesh Pathirana recently asserted that Litro Gas has the capacity to fulfil the entire LPG requirement of the country, and that the Government has sufficient LPG reserves.
Having adequate reserves is not even remotely a solution, given that LPG is a product that is consumed every day, and needs to be imported. The short term assurance the Government gives will last until reserves remain; but in a context where Sri Lanka has to keep importing LPG amidst dwindling foreign reserves, this issue is unlikely to come to an end without a long term plan. However, the ongoing discussions do not show any promising signs as far as the long term plans for this issue are concerned. One of the solutions Litro Gas proposed was filling Laugfs Gas PLC gas cylinders to fulfil the shortage that is likely to be created as a result of Laugfs Gas PLC’s withdrawal from the business; but this does not give a solution to the decreasing foreign reserves.
The Government has asked the people to refrain from unnecessarily worrying about the prevailing LPG situation. But these fears are not unwarranted – when there are unprecedented queues to purchase LPG and when there are doubts as to whether gas cylinders contain the quantity it should contain, people have every right to be concerned.
One may say that the State-owned gas supplier taking over the gas sales, in the event the private gas supplier has to shut down, would be the ideal solution, due to the notion that the Government having control over the industry gives a sense of assurance of quality and price control. However, if that were to happen, that would create a monopoly where ensuring the quality and price of gas will not be a pressing concern, because there is no other option for the people and no competition for Litro Gas.
Both Litro Gas and Laugfs Gas have requested permission to hike prices, as they keep suffering losses, in the absence of a gas pricing formula which takes into account fluctuations in world market prices, to the point where they cannot continue operations. This is where this issue becomes more complicated. Sri Lanka does not produce LPG, and it has to keep importing LPG, which will have a direct impact on the dwindling foreign reserves. If the Government decides to increase LPG prices, which seems like the most pragmatic solution at the moment, gas suppliers will not face bankruptcy; however, the people’s cost of living will increase. If the Government decides not to increase the prices, the only gas supplier, Litro Gas, will suffer losses, compelling the State to spend taxpayers’ money to in turn cover that loss. Either way, it is the people who are going to have to pay, and therefore, whatever the decision the Government takes, it should be aimed at easing the burden on the people while ensuring that the Government does not face the same fate, and Sri Lanka certainly does not want another Ceylon Petroleum Corporation (CPC) that keeps suffering loses.
The issue just started, but it will not remain the same. At some point, the Government will have to take a decision aimed at saving the industry, the country’s economy and the people. However, the more time the authorities take, the more difficult this decision will become. Therefore, perhaps the Government needs to keep politics aside, and acknowledge the issue at hand and do what needs to be done, as unpopular as it may prove to be.
The ‘gassy’ problem
11 Aug 2021
The ‘gassy’ problem
11 Aug 2021
Even though the Government maintains that there is no liquefied petroleum gas (LPG) shortage in the country, what the consumers trying to purchase LPG experience is different. During the past few weeks, a lack of LPG was reported from many parts of the country, and even yesterday (11), long queues could be seen in front of gas retailers in some areas including in Colombo.
The discussion about the LPG crisis is not a new one, although the only response the Government has given in this regard is the assurance that there would be no room for a shortage. However, assurances never resolved any problem, and perhaps it is time for the Government to acknowledge the gravity of the situation, without waiting until it worsens to the point where it becomes a national level crisis.
The current LPG crisis first arose when the State-owned gas supplier, Litro Gas Lanka Limited (LGLL) and privately owned Laugfs Gas PLC, each accounting for roughly 70% and 30% of the market share, respectively, requested permission for a price hike, in order to save the industry from continuing losses and possible collapse. The Government’s refusal to grant permission compelled Laugfs Gas PLC to halt operations, stating that as a privately owned firm, they could not survive amidst sustained losses, which is an understandable move. However, Litro Gas is ready to continue its operations. Cabinet Co-Spokesman Dr. Ramesh Pathirana recently asserted that Litro Gas has the capacity to fulfil the entire LPG requirement of the country, and that the Government has sufficient LPG reserves.
Having adequate reserves is not even remotely a solution, given that LPG is a product that is consumed every day, and needs to be imported. The short term assurance the Government gives will last until reserves remain; but in a context where Sri Lanka has to keep importing LPG amidst dwindling foreign reserves, this issue is unlikely to come to an end without a long term plan. However, the ongoing discussions do not show any promising signs as far as the long term plans for this issue are concerned. One of the solutions Litro Gas proposed was filling Laugfs Gas PLC gas cylinders to fulfil the shortage that is likely to be created as a result of Laugfs Gas PLC’s withdrawal from the business; but this does not give a solution to the decreasing foreign reserves.
The Government has asked the people to refrain from unnecessarily worrying about the prevailing LPG situation. But these fears are not unwarranted – when there are unprecedented queues to purchase LPG and when there are doubts as to whether gas cylinders contain the quantity it should contain, people have every right to be concerned.
One may say that the State-owned gas supplier taking over the gas sales, in the event the private gas supplier has to shut down, would be the ideal solution, due to the notion that the Government having control over the industry gives a sense of assurance of quality and price control. However, if that were to happen, that would create a monopoly where ensuring the quality and price of gas will not be a pressing concern, because there is no other option for the people and no competition for Litro Gas.
Both Litro Gas and Laugfs Gas have requested permission to hike prices, as they keep suffering losses, in the absence of a gas pricing formula which takes into account fluctuations in world market prices, to the point where they cannot continue operations. This is where this issue becomes more complicated. Sri Lanka does not produce LPG, and it has to keep importing LPG, which will have a direct impact on the dwindling foreign reserves. If the Government decides to increase LPG prices, which seems like the most pragmatic solution at the moment, gas suppliers will not face bankruptcy; however, the people’s cost of living will increase. If the Government decides not to increase the prices, the only gas supplier, Litro Gas, will suffer losses, compelling the State to spend taxpayers’ money to in turn cover that loss. Either way, it is the people who are going to have to pay, and therefore, whatever the decision the Government takes, it should be aimed at easing the burden on the people while ensuring that the Government does not face the same fate, and Sri Lanka certainly does not want another Ceylon Petroleum Corporation (CPC) that keeps suffering loses.
The issue just started, but it will not remain the same. At some point, the Government will have to take a decision aimed at saving the industry, the country’s economy and the people. However, the more time the authorities take, the more difficult this decision will become. Therefore, perhaps the Government needs to keep politics aside, and acknowledge the issue at hand and do what needs to be done, as unpopular as it may prove to be.
Kapruka
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Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Automobile, Mother and Baby Products, Clothing, and Fashion. Additionally, Kapruka offers unique online services like Money Remittance, Astrology, Medicine Delivery, and access to over 700 Top Brands. Also If you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.Send love straight to their heart this Valentine's with our thoughtful gifts!