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Litro prices hiked following Chair’s warning

26 Apr 2022

  • New Chairman Vijitha Herath said no supply without price hike
  • 12.5 kg cylinder now Rs. 4,860, 5 kg at Rs. 1,945
Following a statement by Litro Gas Lanka Ltd. Chairman Vijitha Herath yesterday (26) that the company would be unable to provide liquefied petroleum gas (LPG) to consumers unless there was an increase in LPG prices, Litro announced a price hike in its LPG cylinders with effect from today (27), indicating that the Government granted its approval to the decision. Accordingly, Litro Gas Lanka, which is the primary LPG supplier in Sri Lanka, has announced an increase in the price of its LPG cylinders. Accordingly, the revised price of a 12.5 kg LPG cylinder will be Rs. 4,860, up by Rs. 2,185 from its previous rate of Rs. 2,675. Meanwhile, the price of a 5 kg cylinder will be increased by Rs. 874 to Rs. 1,945, while the 2.3 kg cylinder will undergo a price hike of Rs. 404, with the revised rate at Rs. 910. Litro previously announced a price hike of its 12.5 kg LPG cylinders last Friday (22), but reversed the move hours later, as the price revision had not received the Government’s approval. The company later said the increases in LPG prices would be made only after receiving the approval of the Cabinet of Ministers. Litro Chairman Herath, at a media briefing held at the Presidential Media Division yesterday (26), said that he hoped that the Government would approve the proposed price increase. “There has been no price hike yet. But there is a proposed price revision and we hope that the Government decides and increases the gas price. If the company is to acquire LPS for distribution, we have to sell it at the correct price.” He noted that Litro Gas Lanka faces a cost of Rs. 5,500 per 12.5 kg cylinder, despite it being sold at around Rs. 2,500. “Before last year, the company was a profit-making one. Last year alone, the company faced a loss of Rs. 24 billion. This is because the prices were not increased. Only 25% of families solely depend on gas, while others use firewood, both firewood and gas, or electricity. Yet, all families bear the cost of this loss,” noted Herath. “This price revision is not for the company to profit; but there is no other solution to import gas into the country. One ship came yesterday and another two are expected this week, but there is no money for new imports after that,” said Herath. Furthermore, Herath said that a pricing formula is necessary in order to ensure that prices fluctuate with the way that global prices fluctuate. He further commented on discussions of aid with the World Bank. “We only need about US dollars (USD) 40 million per month for the import of LPG. Now, the new economic policies state that mostly essentials can be imported. So we do not anticipate that the dollar shortage will affect the import of gas hugely in the future, if the prices can be fixed. The World Bank has informed us that they will give us money to open letters of credit for the import of gas. We need about $ 35 million to open an LC for one month,” said Herath. He added that $ 120 million has been allocated to Litro Gas Lanka through the Indian credit line as well. Former Litro Gas Lanka Chairman Theshara Jayasinghe resigned on 15 April. In his resignation letter to President Gotabaya Rajapaksa, Jayasinghe claimed that people were suffering due to the negligence of the authorities who had previously been managing and regulating the country’s finances.  He further charged that the support of everyone involved in the overall economic structure of the country is necessary in order to resolve the gas crisis, as it cannot be resolved internally through the company. On 21 April, Herath was appointed the new Chairman, and on 22 April, a price hike to Rs. 5,175 per 12.5kg cylinder was announced by the company. However, as mentioned, this decision was almost immediately reversed by the Government.


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