Price hike on LPG inevitable - Laugfs Chairman
A price hike on a cylinder of Liquid Petroleum Gas (LPG) was
inevitable due to the steadily increasing world crude oil prices and the
demand for LPG gas, said Chairman, Laugfs Gas Holdings (Pvt) Ltd. W. K.
He was addressing the media on the price revision of a 12.5kg Laugfs
LPG cylinder which came into effect from January 3.
Laugfs Gas Ltd. obtained approval from the Consumer Affairs Authority
(CAA) to increase the price of a cylinder by Rs. 212. The revised price
of a 12.5kg LPG Laugfs cylinder is Rs. 1,460.
The price revision of a LPG cylinder was based on the new formula
pricing mechanism agreed between the (CAA) and the Laugfs Gas Ltd on
The pricing formula is based on the weighted Average Saudi Aramco
Contract Price for the past two months/Mt, ocean freight/Mt,
insurance/Mt, CIF value and terminal fee. Wegapitiya said since LPG is
extracted from crude oil in the refining process its price depends on
world crude oil prices.
The price of crude oil fluctuates as any other commodity during the
year. The world LPG price increases with the approach of the Northern
hemisphere winter and decreases to some extent during the autumn and
Wegapitiya said world crude oil prices are expected to drop in March
or April which will help dealers to reduce the price of LPG.
Laugfs Gas Ltd. purchases 35 per cent of its requirement of LPG from
the refinery of the Ceylon Petroleum Corporation and the balance from
the world market.