The Trade, Commerce, Food Security, and Cooperative Development Ministry yesterday (31) assured there is no need to invite additional companies into the domestic liquefied petroleum gas (LPG) market at present, as existing suppliers - Litro and Laugfs - are continuing to meet the country’s demand.
Speaking to The Daily Morning, Deputy subject Minister R.M. Jayawardana said that the current market structure remains sufficient, noting that Litro Gas Lanka Limited handles about 80 per cent of the country’s supply, whereas Laugfs Gas PLC distributes the remaining 20%. Given this distribution share, he said that the Government does not see a requirement to open the market to more companies in the name of competition.
He explained that Litro has so far issued around five million domestic gas cylinders, while Laugfs has issued approximately two million, bringing the total number of cylinders in circulation in the country to about seven million. Of these, he said that more than two million cylinders are not in regular use, as many consumers keep them filled at home as a backup during periods when they fear shortages. “Usually, when people expect a shortage, they refill spare cylinders and keep them at home. This practice temporarily increases the demand and affects distribution patterns."
Speaking further, he said that Litro distributes about 33,000 MT of LPG on average each month, while Laugfs distributes about 7,000 MT, bringing the combined monthly distribution to roughly 40,000 MT. However, he noted that Litro alone imported about 38,000 MT of LPG in March.
"Disruption experienced in the gas supply in recent weeks was due to a collapse in the Laugfs distribution network that lasted around one and a half months. Such situations tend to occur periodically. What Litro usually does is procure their annual gas requirements through a tender process in one go. But, we have noticed that Laugfs is placing orders for gas depending on the prevailing global market prices. When they attempt to purchase from lower-priced sources, it can interrupt the continuity of supply," Jayawardana added.
He further said that about 5,000 MT of additional gas had already been released to the market by Litro to stabilise distribution. "There is currently no supply issue affecting Litro, and Laugfs has also resumed distribution. There is no shortage of gas at the moment. Supply conditions will return to normal after April. If supply disruptions at Laugfs continue for some reason, additional stocks from Litro could be released to maintain stability in the market."
Gas distribution across parts of the country experienced disruptions over the past few weeks, with consumers reporting delays in cylinder availability and long waiting times at distribution points.