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Saturday June 3rd, 2023

Sri Lanka’s mysterious gas explosions become nobody’s baby

ECONOMYNEXT – A distressing sight in the village of Waligamuwa in Sri Lanka’s central district of Matale last weekend brought home a sombre truth: that lofty ideals such as accountability are perhaps destined to remain abstract concepts and not much more.

Villagers had gathered to mourn 53-year-old Ashoka Priyangani, a mother of four who’d succumbed to burn injuries from a cooking gas-related explosion in her own kitchen. Her family, friends and neighbours were seen congregated round the coffin, angrily protesting and demanding justice from wherever it might come.

The unsuspecting Priyangani had been trying to cook as usual when an explosion caused her severe burn injuries that would soon prove fatal. Her family had rushed her to Kandy hospital, where she died leaving behind a family of five.

Priyangani’s grieving widower now has but one goal: to take both the government and the gas company to court.

The liquid petroleum (LP) gas explosion that ended Priyangani’s life was no isolated incident. A wave of such explosions, fires and related incidents in the last 48 days has shaken Sri Lankans, a vast majority of whom are already battling worsening crises across multiple fronts.

According to police, nearly 730 incidents have been recorded from November 01 to December 15. Of these, 24 explosions were due to gas leaks directly from the cylinder while the rest were, according to authorities, due to subpar cookers or accessories such as regulators and hoses.

A majority of the incidents were linked to LP gas sold by the state run Litro Gas Lanka Ltd.  Litro maintains a duopoly on cooking gas supply in Sri Lanka with Laugfs Gas (Pvt) Ltd.

“Can’t the government or the Consumer Affairs Authority (CAA) advise the public to stop using gas until they clear this mess up?” news footage showed a relative of Priyangani’s as saying.

Over six weeks after the first explosion, Sri Lanka’s Court of Appeal on Friday (17) ordered the gas companies to recall LP gas cylinders in the market and replace them free of charge with cylinders approved by the Sri Lanka Standards Institute.

The court also ordered that both Litro and Laugfs maintain a mix of 70 percent butane and 30 percent propane in the LP gas cylinders they sell, following unverified speculation that a change in composition was the reason for the explosions.

Experts have hypothesised that increasing the propane content of the cylinder to 50 percent had resulted in high pressure which had led to leaks from the cylinder. However, this has yet to be proven scientifically.

Related: Sri Lanka Court of Appeal orders LP gas companies to recall cylinders: report

The court orders notwithstanding, no one has yet taken responsibility for the series of reported incidents let alone the death. Authorities have also yet to determine the exact cause of the explosions, and, despite the existential threat posed to millions of Sri Lankans, critics claim, no concrete steps appear to have been taken.

Deepening mystery

Glass-topped gas cookers exploding appears to be a fairly common phenomenon in India, Pakistan and some East Asian countries. One theory put forward by some experts is that this is due to the ignition/pilot light firing up – under the glass – as the knob does not come out after fire is reduced or shut down. It is pushed in.

The knob sometimes doesn’t come out due to dirt in the mechanism, but why this is suddenly the case appears to be a mystery. It may be because there was an earlier bad gas stock with oil residues which was brought due to CAA price controls and it clogged up the works, analysts have hypothesised.

If the alleged change in composition change is indeed to blame, analysts say, it is definitely a fallout of the price controls.

Economic interventions leading to wrong incentives for agents has led to unintended consequences as is typical, critics have argued.  However, the gas companies have operated for decades without much trouble, so why now appears to be the biggest question.

Total inaction

Public confusion over the bizarre explosions is rising and frustration over the apparent lack of accountability appears to be setting in the face of alleged government inaction.

A group of ruling Sri Lanka Podujana Peramuna (SLPP) members were seen praying at the Seenigama Dewalaya earlier this week, seeking divine retribution on the gas companies who had “endangered the lives of consumers”. Short of this, no concrete action appears to have been taken, critics say.

The Consumer Affairs Authority (CAA) has also largely remained mum about the explosions though parliament has seen heated arguments over the matter, even as explosions continue in various parts of the country.

“Nobody tells with any clarity about what is really wrong with gas,” SLPP MP Anura Priyadharshana Yapa told the media this week when he was asked to comment. Yapa is now critical of the government.

“If it is in another country, the board of directors (of the gas company) would have been dragged by their ears and arrested. Now they pretend as if they don’t know anything. This will lead the country to anarchy,” he said.

Friday’s Court of Appeal decision saw the gas companies ordered to revert to the earlier 30-percent propane composition and also have the Sri Lanka Standards Institute oversee the quality of gas being distributed in the country.

Critics, however, claim that the damage has already been done.

Already the two gas suppliers have ceased distribution in the market. Many consumers have now switched to kerosene. The demand for kerosene has risen by 100 metric tons in the past two months, the state-run Ceylon Petroleum Corporation (CPC) said.

The LP gas shortage has already hit Sri Lanka’s hotels, restaurants and canteens hard.

Asela Sampath, the chief of the All Island Canteen Owners’ Association (AICOA,) said on Friday that more than 80 percent of canteens and hotels will be closed from Saturday (18) onward as a result.

Meanwhile, an LP gas shipment from Bangladesh had been docked in the Colombo port owing to a quality issue. The government later directed Litro not to buy the consignment as it does not meet the standards. However, on Friday, the Secretary to the Ministry of Technology reportedly granted permission o unload gas after he tested a sample aboard the ship.

Allegations and counter allegations

“We cannot ascribe a monetary value to a life that was lost. We have asked these companies to do justice by them. We will also take part in that,” Consumer Affairs State Minister Lasantha Alagiyawanna told the media this week.

“We are doing our best to solve this matter as quickly as possible.”

Litro, for its part, rejects the government’s allegations. The state-run gas company maintains that it had nothing to do with the recent spate of explosions.

“It’s too early to comment on who will take responsibility for the death as investigations show a completely different result as opposed to a gas explosion. So further investigations are going on,” a Litro official told EconomyNext requesting anonymity as they were not authorized to comment on the matter.

Meanwhile, police confirmed that Priyangani’s death was due to a gas explosion, but noted that investigations are still under way to determine the exact cause of the incident.

“According to hospital reports, the patient had died due to severe burns from the incident. The gas pipe and other [accessories] have been sent to the government analyst for a report,” police said in a statement.

Police also said it was suspected that the end of hose connecting the cylinder to the stove had become loose and a leak had occurred while the stove was already lit. The fire must have gone through the pipe because the gas supply had not been cut off from the regulator, police said.

According to writer and analyst Vinu Wijesekara, Sri Lanka consumes over 440,000 metric tons of LP gas annually. Approximately 42% of the population exclusively uses gas cylinders for domestic purposes while 43% use firewood alongside LP gas and 13-15% of the population exclusively uses firewood, Wijesekara wrote to the privately owned Daily FT in 2018.

Litro controls 80 percent of the market while only other competitor Laughfs controls the rest.

The government has contemplated plans for the CPC to open another state-owned LP gas company, but the plan has been put on hold due to financial constraints of the country, which is facing an increasing risk of sovereign debt defaults.

Legal perspective

“This unfortunate death could have been prevented if the authorities had taken necessary and timely action to monitor the quality of gas cylinders & ensure the safety of consumers,” Human Rights lawyer Bhavani Fonseka told EconomyNext.

“Questions must be asked as to why authorities failed to take action that could have prevented the explosions.”

Fonseka, a government critic, also said relevant officials must be held to account and the affected parties should consider making a police complaint so that an investigation takes place that is the first step pertaining to criminal action against those responsible.

“Additionally, affected parties can also explore filing a case in the Supreme Court in terms of violating their fundamental rights. These are some measures that can be taken to obtain redress and justice for the victims.”

Questions must also be asked pertaining to the regulatory framework governing gas cylinders and why authorities were unable to ensure the safety that is required of such products, she said.

“Recent months have also seen officials formerly with the Consumer Affairs Authority commenting on discrepancies with such entities and the need for urgent reforms. Questions should be asked as to whether such reforms have taken place and the impact on the rights of citizens,” she said.

“It is incumbent on the opposition, civil society and media to keep attention on this issue and insist that there is a thorough investigation and accountability. Public pressure is also required to ensure the state and private actors adhere to quality control standards and that the rights and safety of consumers are given priority,” she added. (Colombo/Dec18/2021)

Reported by Shihar Aneez, Mahadiya Hamza and Chanka Jayasinge

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  1. L Perera says:

    Yesterday (18th Jan 2022), a fire had burnt gas cooker & table due to a leak emerged suddenly at a house at Heiyanthuduwa (Sapugaskanda). May I know what legal actions to be taken against whom.

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  1. L Perera says:

    Yesterday (18th Jan 2022), a fire had burnt gas cooker & table due to a leak emerged suddenly at a house at Heiyanthuduwa (Sapugaskanda). May I know what legal actions to be taken against whom.

Sri Lanka to ramp up weekend fuel deliveries after petrol price cut

More deaths reported at Sri Lanka fuel queues

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Petroleum Corporation will be operating on the weekend to complete all fuel deliveries to end vehicle queues forming outside fuel stations after the price revision earlier in the week, Energy Minister Kanchana Wijesekera said.

“Instructions have been given to CPC and Ceylon Petroleum Storage Terminals to continue fuel deliveries on Saturday and Sunday this week to supply sufficient stocks to all fuel stations,” Minister Wijesekera said in a TWITTER.COM MESSAGE

“To reduce expenses on overtime, CPC and CPSTL have not been operating on Sundays and public holidays in the last 4 months,” Wijesekera said.

“Non-placement of orders by fuel stations from last Saturday, anticipating a price reduction, not maintaining minimum stocks, immediate increase in demand by consumers after the price revision, and quota increase have created shortages in the fuel stations.”

The Minister in April 2023 said all fuel stations would be required to maintain a minimum of 50 percent of stock tank capacity.

“I have asked CPC to review and suspend the license of fuel stations that had not maintained minimum stocks.” (Colombo/ June 02/ 2023)

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Sri Lanka bonds yield up at close, rupee at 291.75/292.50 against the US dollar

ECONOMYNEXT – Sri Lanka’s bonds closed steady on Friday, dealers said, following the central bank’s decision to cut its main policy rate by 250 basis points.

The Spot US dollar closed at 291.75/292.50 rupees, dealers said.

The rupee opened at 290.25/75 to the US dollar Thursday and closed at 292.50/295.50 to the US dollar.

A bond maturing on 15.09.2027 closed at 24.70/90 percent up from 24.50/90 percent a day earlier, dealers said.

A bond maturing on 15.05.2026 closed at 25.75/26.25 percent up from 25.00/26.00 percent a day earlier.

A bond maturing on 01.05.2025 closed at 27.00/30 percent, up from 26.30/27.00 per cent at last close.

A bond maturing on 01.07.2032 closed at 20.25/21.00 percent, up from 20.00/40 per cent at last close.
(Colombo/ June 02/2023)

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Sri Lanka’s shares edge up on positive macroeconomic sentiments

ECONOMYNEXT – Sri Lanka’s shares closed higher in trade on Friday, over positive macro-sentiments encouraging investors to redeem their interest towards buying, an analyst said.

The main All Share Price Index was up 0.72 percent or 62.19 points to 8,753.80,  while the most liquid index S&P SL20 was up 0.68 percent or 16.87 points to 2,487.29.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.

Prior to the Monetary Policy investors were quite optimistic that inflation is to lower and interest rates will decrease and since exp, an analyst said.

Sri Lanka Central Bank is waiting for the government proposal on the domestic debt restructuring (DDR), the central bank governor Nandalal Weerasinghe said amid uncertainty over DDR and speculations over instability in the banking sector.

“On debt restructuring, the borrower is the ministry of finance’s treasury. Certainly we will announce what the strategy will be. We are waiting for a government proposal,” Weerasinghe said.

Sri Lanka’s investors are waiting on assurances to be made on debt restructuring and optimization, Central Bank Governor Nandalal Weerasinghe said, “It is up to the government to clear the uncertainty, because from our side we have done that part.”

The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.

The speculation of DDR has hit the market and the risk premium has kept the market lending rates well above the central bank’s policy rates. The government has yet to present its plans on DDR.

Weerasinghe said the central bank has done its best to reduce the risk premium through bringing down the market lending rates while keeping the policy rates unchanged.

Sri Lanka’s President Ranil Wickremesinghe has discussed progress of International Monetary Fund program and debt restructuring during a visit of Deputy Managing Director Kenji Okamura, statement said.

“The discussion primarily focused on the progress of the IMF program between Sri Lanka and the IMF,” a statement from President’s office said.

“Attention was also paid to the on-going debt restructuring negotiations.”

However Officials from IMF have said Sri Lanka has to focus on expanding taxes.

“We discussed the importance of fiscal measures, in particular revenue measures, for a return to macroeconomic stability,” Deputy Managing Director Kenji Okamura said in a statement.

The finance ministry this week issued rules requiring everyone above 18 year of age to register to pay income tax.

“I was encouraged by the authorities’ commitment to negotiate a debt strategy in a timely and transparent manner.

The market generated a revenue of 738 million rupees, while the daily average was 1 billion rupees.

Top gainers in trade were Vallibel One, LOLC Finance and Browns Investment. (Colombo/June02/2023)

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