ECONOMYNEXT – Sri Lanka’s Laugfs Gas Plc, badly hit by price controls from the Consumer Affairs Authority said it had expected resume supplies to the domestic market on August 20, though it will still make losses at a raised controlled price.
“We have placed an order for a shipment and we expect to re-start operations in a small way on August 20,” Laugfs Gas Chief Executive Chaminda Ediriwickreme told EconomyNext.
The Consumer Affairs Authority used its coercive powers to block a price increase throughout 2020 making the firm lose 1.8 billion rupees in the six months to June.
The Consumer Affairs Authority permitted a 363 rupee price increase on August 12, though Laugfs has asked for a 475 rupee hike in June based on the average benchmark prices in May and June.
CAA approved 363 rupee increase after Laugfs halted supplies.
Ediriwickreme said since the original application costs had risen about 650 rupees.
Laugfs may still make a loss of around 200 million rupees a month, he said.
Sri Lanka has severe regime uncertainty where the state intervenes in business and causes them losses.
Laugfs has also invested in infrastructure but has been unable to recover costs due to state interventions.
State-run Litro Gas, which was previously owned by Shell Gas is maintaining prices bankrolled by tax payer.
In addition to a global energy, food and metals bubble fired by the US Fed, Sri Lanka has also printed money and depreciated the rupee. (Colombo/Aug16/2021)