Sri Lanka rejects request for LPG price hike
Oct 18, 2018 16:51 PM GMT+0530 | 0 Comment(s)
ECONOMYNEXT – Sri Lanka’s Commerce Ministry said it has rejected a request by Litro Gas Lanka (LGL), the biggest importer and supplier of liquid petroleum gas, to raise prices because of rising crude oil prices.
“Sri Lanka will not allow any sudden hike in domestic LPG gas prices right away, even if the global crude rates continue to gallop,” a statement said.
“Our priority is to safeguard the consumers,” it quoted Minister of Industry and Commerce Rishad Bathiudeen as saying at a meeting with officials from the Consumer Affairs Authority (CAA) and Litro Gas Lanka.
Litro asked the CAA to raise the ‘transport cost component’ within the LPG pricing formula already agreed by with CAA.
The statement said the Litro request would be considered by the head of the government’s Cost of Living Committee, Minister Malik Samarawickreme as well as the Finance Ministry.
Litro representatives said that the diesel costs have continuously risen since 2007 making their LPG transport costs too to escalate, eroding margins.
“The costs have come to a level where they cannot profitably operate anymore and industry is facing an imminent shutdown if it continues in this way,” the statement quoted Litro official as saying.
CAA officials said that Sri Lankan domestic LPG prices in the market are now determined by a pricing formula agreed between the two LPG players, LGL and Laugfs Gas, and the CAA.
Sudden, ad-hoc changes are adverse to the consumers and households that are heavily dependent on the cylinders, they said.
Global crude oil prices are at a four year high.
In September the CAA allowed LPG prices to be adjusted for transport to different districts, taking into account distance.
(COLOMBO, 18 Octber, 2018)