• Awaits Treasury approval to use Hambantota terminal 

LAUGFS Gas PLC expects three liquefied petroleum gas (LPG) shipments to arrive in Sri Lanka this month, as the company seeks to restore domestic supplies amid continuing supply constraints, while the Government has turned to Litro Gas Lanka to cover the shortfall and initiated legal action against LAUGFS over its failure to meet agreed supply commitments.

In a statement yesterday (3), LAUGFS said the shipments were scheduled to arrive at the Hambantota Port between 12 and 14 November, 15 and 17 November, and 24 and 28 November. The shipments are expected to be supplied by OQT and Geogas.

However, the company cautioned that the arrival dates remain subject to shipping schedules, port operations and relevant regulatory approvals.

LAUGFS said it was also working with the relevant authorities to obtain approval to release LPG stocks arriving through its Hambantota terminal to the domestic market.

The company attributed the challenges affecting international LPG supply chains to tensions in the Middle East and disruptions to maritime transportation through the Strait of Hormuz.

Although its Hambantota LPG import and export terminal, operated by subsidiary LAUGFS Terminals Ltd., has a storage capacity of 30,000 metric tonnes (MTs), its ability to supply the domestic market has been restricted by regulatory conditions linked to its Commercial Hub status under the Board of Investment (BOI) framework.

Accordingly, LAUGFS has sought temporary approval to use the terminal for domestic LPG supplies for a period of three months. It is also working with the BOI, the Finance Ministry, Customs and the Import and Export Control Department to establish the necessary regulatory and operational arrangements to operate the terminal outside its existing Commercial Hub status, subject to applicable taxes and duties.

According to the company, the BOI Chairperson has informed it that the Treasury Secretary has been requested to facilitate the necessary approvals within one week, following the President's instructions. However, the approvals had not been received at the time of the announcement.

As a further measure to strengthen supply security, LAUGFS said it had called for a fresh tender to secure direct LPG supplies to the Colombo Port from January 2027.

Meanwhile, Cabinet Spokesperson Dr. Nalinda Jayatissa said yesterday that Litro Gas Lanka was increasing supplies to compensate for LAUGFS' failure to supply its agreed volumes.

"There’s a problem. Litro Gas Lanka supplies 85 per cent of the market while LAUGFS supplies 15%. The monthly demand is 38,000 MTs, out of which 32,000 MTs is provided by Litro while LAUGFS provides 6,000 MTs," he said at the Cabinet media briefing.

He said that, due to the shortfall in LAUGFS supplies, Litro was required to increase its monthly supply to 44,000 MTs.

Of this amount, 25,000 MTs had been supplied during the first 15 days, while a further 19,000 MTs was expected to be distributed during the remaining 15 days. An additional 12,000 MTs would also be distributed, he said.

Jayatissa said that 3,900 MTs had been distributed on 31 October, with a further 3,900 MTs received on 1 November and another 3,900 MTs arriving on 2 November being distributed. This amounted to 11,700 MTs within four days, he added.

He also confirmed that the Consumer Affairs Authority (CAA) had initiated legal action against LAUGFS over its failure to supply the agreed quantities during the period in question.

The company’s explanations, including the impact of the Middle East situation, were not considered justifiable, he said.