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Wednesday February 1st, 2023

Sri Lanka to start cooking gas distribution from May 19 – Litro chairman

File photo – GAS LINE: People waiting in line to get gas in a suburb of Colombo, Sri Lanka.

ECONOMYNEXT – Sri Lanka’s state-owned Litro Gas Lanka Ltd. will start distribution 80,000 cylinders per day from Thursday (19) after unloading two cooking gas shipment of 3,700 metric tonnes each from Oman, officials said on Wednesday (18).

People have started street protests on a daily basis by blocking roads demanding cooking gas after waiting in queues for days. Litro has stopped distribution as it did not have dollars to import cooking gas.

A ship from Oman carrying 3700 metric tonnes of cooking gas arrived in the Sri Lankan waters on Tuesday and another with similar capacity is expected to arrive on Wednesday.

“We will be able to supply at least 7-8 days using these two consignments,” Vijitha Herath, the Chairman of Litro told Economy

The two ships are out of four consignments signed with Oman Trading Company under a 15 million US dollar agreement for 15,000 metric tonnes of gas.

The Tuesday’s shipment is the first of the four consignment.

“These shipment costs 15 million dollars and for both consignments, we will be paying 7 million dollars,” Herath said.

Sri Lanka average daily cooking gas demand is 80,000 cylinders and 27 percent of the households in the
country only relies on gas for cooking.

Herath said Litro will have to make a payment of another 7 million dollars to get two more shipments. The Litro was expected to start distribution on Wednesday, but rough seas has delayed unloading and pushed the start of distribution to Thursday.

People were seen in long queues on Wednesday in a Colombo distribution center with some household
leaving five or more cylinders tied together and leaving them at the distribution centers.

People Struggle 

Kumari, a 40-year old seamstress from Maradana had come all the way to the Flower road
filling station in Colombo 03 at 3 am on May 18 to get fuel after it was announced on news that cylinder
distribution will begin on Wednesday.

“My husband is a three-wheel driver. We both came here at 3 am to get fuel and cylinder because we
have not eaten properly in over two-weeks,” she said.

“When we came here, there were people already standing. We have no means to use a firewood stove
as our house is very small and smoke fills up. So I tried using rice cookers but that took so much time.”

“I borrowed the rice cooker from my neighbor and I had to spend all my day cooking in it, I am a
seamstress and I can’t afford to spend my whole day in the kitchen.”

From a 1 billion US dollars Indian credit facility, Sri Lanka has renegotiated to allocate 160 million dollars for cooking gas imports.

Herath said Litro wants to start floating tenders to procure LP gas from India and expects to get the bids from Indian
suppliers within a week. The company, which accounts for the 80 percent of the cooking gas market share, needs up to 35 million dollars’ worth of cooking gas supply and the Indian credit line would suffice for about four to five months, he said.

Sri Lanka has a shortage of 30,000 metric tons of cooking gas gas at the moment and Litro says it fills about 1,000 metric tons per day.

If the Indian procurement works as planned, Litro expects to buy cooking gas from India by the second week
of June, Herath said.

He also said the World Bank also has promised a 80 million facility to buy LP gas which would be ready by
the end of June.

“So from that also we will able to sorted out the dollar requirement,” he added.

“Hopefully we will be able to settle the gas issue in one month time. That’s our target. But for all these,
we need to do the procurement on time as well as the tender. If everything goes according to plan we
will be able to solve this in maximum one or two months.”

Sri Lanka has opted for a soft-default and is not in a position to pay off any of it debts.
Emphasizing the country’s economic crisis, Prime Minister Ranil Wickremesinghe on Monday said the treasury is unable to raise even 1 million dollars. (Colombo/May18/2022)

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Sri Lanka bond yields down at close

ECONOMYNEXT – Sri Lanka’s bond yields were down at close following a bond auction on Wednesday, dealers said while a guidance peg for interbank transactions remained unchanged.

“The rates were steady at the auction,” a dealer said.

“This can be a signal to the market saying the rates will go down in the future.”

A bond maturing on 01.07.2025 closed at 32.40/60 percent, down from yesterday’s 32.60/85 percent.

A bond maturing on 01.05.2027 closed at 29.10/35 marginally down from yesterday’s 29.20/75 percent.

The Central Bank’s guidance peg for interbank US dollar transactions remained unchanged at 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 371.38 rupees on Friday, data showed. (Colombo/Feb 01/2022)

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Sri Lanka bill auction hits pothole after 2025 bond spike

ECONOMYNEXT – Sri Lanka sold only 45 billion rupees in Treasury bills at Wednesday’s auction after offering 120 billion rupees, data from the state debt office showed, amid market confusion over a spike in a two year bond at an earlier action.

30.1 billion rupees of 3-month bills were sold at 29.91 percent, unchanged from a week earlier after offering 60 billion rupees for auction.

5.1 billion rupees of 6-month bills were sold at 28.72 percent, flat after offering 30 billion.

10.3 billion rupees of 12-month bills were sold at 27.72 percent after offering 30 billion.

Phase II subscriptions have been opened.

The market was foxed after the 2025 bonds were accepted at sharply higher yield than market on January 30, dealer said.

There was further confusion as the there was an outright purchase of 2025 at around 29 percent earlier in January.

Some investors speculated that the authorities were trying to drive more buyers towards short end bonds as bill volumes were getting larger. (Colombo/Feb01/2023)

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Sri Lanka services exports down 5.9-pct in 2022

ECONOMYNEXT – Sri Lanka’s services exports were estimated to have fallen 5.9 percent to 1,876.3 million US dollars, the island’s Export Development Board said.

Services exports estimated is made up of ICT/BPM, construction, financial services, transport and logistics.

There are more than 500 ICT companies, the EDB said.

Sri Lanka’s merchandise exports were up 4.6 percent to US dollars 13.1 billion dollars in 2022 from 2021.

Sri Lanka’s goods exports are slowing amid lower growth in Western markets. (Colombo/ Feb 01/2023)

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