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Litro price hike on the horizon

30 Mar 2022

 
  • Chairman urges Cabinet for price hike
  • Blames exchange rate, global rise of LPG prices, pandemic losses
  Litro Gas Lanka Ltd. Chairman Theshara Jayasinghe said yesterday (30) that the State-owned corporation has made a request from the Cabinet of Ministers to increase the price of liquefied petroleum gas (LPG). “We have requested a price increase for LPG from the Cabinet. There are a number of reasons for this,” said Jayasinghe at a media briefing held at the Presidential Media Centre yesterday. However, Jayasinghe refused to divulge how much the requested price hike is. The privately owned Laugfs Gas PLC increased their prices earlier this month, with the new price of a 12.5 kilogramme (kg) domestic LPG cylinder being Rs. 4,199. Official sources told The Morning earlier this month that the requested price hike for Litro Gas Lanka is approximately Rs. 835 for a 12.5 kg domestic gas cylinder. Jayasinghe explained that the global inflation of LPG prices and Covid-19 pandemic-related losses are severely impacting the company. “Last year, the global prices of LPG were around $ 650 per tonne. Now it has gone above $ 1,000, with the transport cost as well. In 2021, during the pandemic, the company used all of the profit it had gained over the past 10 years, about Rs. 9 billion, to ensure a steady price for the consumers. This was spent on taxes and other payments to the Treasury – money we had kept aside for investments. During the last three months of 2021 and the first two months of this year, we were able to get a small profit of Rs. 500 million,” said Jayasinghe. Furthermore, he explained that the sudden floating of the Sri Lankan rupee in the middle of this month resulted in a loss of Rs. 1.8 billion to the company in one night. “For the gas you bought in February, we pay in March. However, this month, the rupee was floated. In one night, the company suffered a loss of Rs. 1.8 billion. Following that, for the ships that arrived in Sri Lanka in March, the loss incurred by the company was Rs. 2.5 billion. The total loss for this month is Rs. 4.3 billion.” According to Jayasinghe, Litro Gas Lanka needs to import 25,000-35,000 metric tonnes (MT) of LPG per month to meet consumer demands. “Our main responsibility is to distribute LPG and for that, we need to import adequate stocks. Compared to other state corporations, Litro Gas Lanka has been able to function without any burden to the Treasury up until March. However, at this moment, the increase of the US dollar and the increase of global prices have affected us.” Commenting on the current situation, Jayasinghe assured that about 100,000 cylinders will be issued to the market this week on a daily basis and added that the company has made an order for 30,000 MT of LPG for April, “the opening of letters of credit (LCs) for which is already in the process”. A heavy gas shortage has plagued the market, alongside shortages of numerous other essential goods, with video reports showing consumers waiting in queues for multiple days to refill their LPG cylinders. Consumers have switched to kerosene to fulfil their cooking needs. However, the increased demand for kerosene, coupled with fuel shortages in the country, has left the public waiting in queues for kerosene as well. Several deaths of citizens have been reported from queues for essential goods. 

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