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Monday November 29th, 2021

Sri Lanka’s Consumer Affairs Authority triggers LPG panic buying with price controls

ECONOMYNEXT – Sri Lanka’s state run Litro gas said, it has ramped up daily issues of liquefied petroleum gas as panic buying was triggered after a private supplier was put out business by te island’s price control agency cutting off part of the supply.

“There is an unnecessary fear going in the country saying there will be a scarcity of gas,” Litro Gas Chairman Theshara Jayasinghe said after public-listed Laugfs said it can no longer bear the losses from selling at controlled prices set by the Consumer Affairs Authority and halted sales.

“At the moment we have the necessary amount of reserved gas in the country. The overseas companies that supply us said they have secured the supply chain for us to get the necessary supply we need as well.”

The CAA has previously created shortages in tinned fish and dhall in the midst of the coronavirus crises. Sri Lanka National Medical Regulatory Authority also created shortages of masks with price controls.

Jayasinghe said the daily need of domestic gas cylinders in the country is 90,000 to 95,000 however for the past five days only Litro gas has issued more than 495,000 cylinders to the market.

“We have taken measures to issue 100,000 cylinders per day to the market in the future,” Jayasinghe said.

“Therefore at a time when we can even exceed the daily amount, and the supply chain is secured no need to panic of a shortage. By doing that many customers will face difficulties.”

Jayasinghe said Litro has given three offers to Laugfs Gas through the Consumer Affairs Authority, but there has been no response so far.

“One is that we can issue gas on cash for them to meet their market need,” Jayasinghe said. “In that way they can fill that gas to their own cylinder and issue to their market and secure their employees jobs.

“The Second one is normally the gas produced by the Ceypetco company (state-run refinery_ is divided into half and 50 percent goes to Litro and 50 percent to Laugfs.

“We said we would offer our 50 percent to Laugfs Gas temporarily to meet their domestic gas cylinder demand until they get back on track”

“The third one is if the Laugfs company agrees we can directly fill their cylinders and directly issue to their agents to meet the market need.”

However Litro, which is government owned, is losing 850 rupees a 12.5 kilogram cylinder sold.

“That is 1.3 billion rupees of loss per year,” Jayasinghe said.

Jayasinghe said, however Litro has the ability to supply 100 percent for the domestic and industrial gas need in the country.

“We can look after the supply but there will be a considerable impact on economy,” he said. “If we were to issue the need of the laugh’s market then the loss for the government will also be higher.”

Global food, energy and metals prices have shot up amid money printing by the US Federal Reserve (the Powell Bubble) to levels not seen since the Bernanke-Greenspan bubble that collapsed in 2008.

Sri Lanka’s central bank has also printed money and busted the rupee from 182 to 203 so far and there are forex shortages when importers armed with printed money seek dollars. (Colombo/ August 04/2021)

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