Business

CAA yet to decide on a further gas price hike

  • Says there can or cannot be another increase

By Yakuta Dawood

The Consumer Affairs Authority (CAA) is yet to arrive at a decision on whether to further increase the price of Laugfs’ gas cylinders, with the company sending continuous letters to the Authority pointing out an agreement both parties had entered in 2007, The Sunday Morning Business learns.

Speaking to us, CAA Executive Director Thushan Gunawardena stated that just recently, the maximum retail price (MRP) for domestic gas cylinders was increased, adding that therefore, another price revision is not yet decided by the CAA pricing committee.

“It’s too early in discussions. We have already given a price revision, so another price revision is still to be decided. However, it can or cannot increase,” Gunawardena said.

Laugfs Holdings Ltd. Chairman W.K.H. Wegapitiya, in a disclosure to the Colombo Stock Exchange (CSE), noted last week that despite CAA approving an upward revision of the prices of a 12.5 kg gas cylinder to Rs. 1,856 and a 5 kg gas cylinder to Rs. 743 for Colombo District consumers on 12 August, the above-mentioned prices are still not acceptable with regard to the pricing formula agreed upon and approved by the Supreme Court in SCFR 163/2007.

“We have once again apprised the CAA of its legal obligations and have requested them to approve price revisions in line with the Supreme Court-approved pricing formula. We are committed to protecting the rights of our stakeholders, including our esteemed shareholders, and will continue to serve the people of Sri Lanka to the best of our ability,” the letter sent by Wegapitiya noted.

The Sunday Morning Business spoke with Wegapitiya in regard to the ongoing matter. When inquired what the reason behind CAA not increasing the prices according to their agreed pricing formula was, he responded saying he is also “unaware and seeking for a response from the CAA”.

When inquired about the same from CAA Executive Director Gunawardena, he refused to divulge further information stating it is an “ongoing court case”.

Meanwhile, Laugfs Gas PLC Group Managing Director/Group Chief Executive Officer (CEO) P. Kudabalage wrote a letter addressing the CAA Chairman on 16 August. Accordingly, the actual price revision in terms of the said agreement should be legally entitled to sell a 5 kg domestic LP (liquefied petroleum) gas cylinder at Rs. 997 and a 12.5 kg domestic LP gas cylinder at Rs. 2,493.

Further in the letter, Kudabalage questions as to how the price determination of the aforesaid increase of Rs. 145 and Rs. 363 is “lawful and valid”.

“The reasons for effecting such arbitrary price increase being unknown, it is prima facie apparent that it must have been made on the basis of irrelevant considerations which are strictly outside the lawful purview and jurisdiction of the CAA. Thereby, violating the express provision of Section 18 of the Consumer Affairs Authority Act No. 09 of 2003, the agreement, and acting in open defence of the Supreme Court order and in contempt of the honorable Supreme Court of Sri Lanka,” the letter mentioned.

Adding further, Kudabalage expressed that the purported price increase of Rs. 145 and Rs. 363 is illegal, unlawful, and has no validity in law. “We will adhere to the purported price increase of Rs. 145 and Rs. 363 under protest and reserving our rights,” the letter concluded.