Liquid Petroleum (LP) gas providers are threatening to curtail import and distribution if the government fails to honour their request to increase prices of a 12.5kg cylinder by at least Rs. 158.
As a result of the delayed price hike Litro Gas has suffered a loss of about Rs. 175 million this month thus far. LAUGHS Gas complained that it is also hit by ‘huge loses’.
LP gas providers have written to the Committee for Cost-of-Living headed by Minister Malik Samarawickrama but to no avail.
“We are losing heavily. The more we sell the more loses we face. One of the options we are looking at is stopping the import and distribution of gas if the government fails to introduce our proposed price hike,” Chairman of LAUGFS Holdings Ltd W.K.H. Wegapitiya told the Sunday Observer.
The industry prices depends of various factors, two key variables that effect prices are the Saudi Armco Contract Price that is announced every month and currency exchange rate of the country.
According to Litro Gas Lanka Limited’s Director, Sales and Marketing/Corporate Affairs, Chaminda Ediriwickrama the Saudi Armco Contract Prices have continued to increase from May.
A solution for this situation is to implement the existing price formula where consideration is given for price changes every two months or to introduce a new price formula, Ediriwickrama explained. He claimed that government bodies, especially the Consumer Affairs Authority (CAA), are responsible when companies go bankrupt, and that it needs to act in a timely manner to avoid dire circumstances. A government source said the CAA is currently not considering a price hike as its best interest lies on the people of the country. He said there is no immediate need to increase prices and the government will take time in introducing a price increase on LP gas. He said, however, the government is taking measures to introduce a new pricing formula for LP gas. Wegapitiya said they are considering three options if the government fails to look into their demands. “One is to go to courts and make them understand, to ignore everything and increase prices or to stop import and distribution altogether,” he said.