Govt. will be compelled to increase LP gas prices - Lasantha

COLOMBO (News 1st); The process of merging the Litro and Laughs to sell domestic gas and setting up a government agency called 'Zeolit' had to be suspended due to the resignation of three members of its board of directors representing Litro.

The board of directors of the new company consists of nine members, including People's Bank, Bank of Ceylon, and the Treasury, as well as three members of the government and Laugfs.

"Three directors from Litro Gas resigned and therefore this new company is not in an active status," said Lasantha Alagiyawanna, the State Minister of Co-operative Services, Marketing Development, and Consumer Protection to Parliament on Wednesday (6).

"Litro Gas during meetings with the Finance Secretary and the President's Secretary had explained that they can import gas at a price less than the present price," the State Minister said adding that approval was given towards this proposal and Litro Gas taken that responsibility upon themselves.

He said following these meetings they had informed they would step away from the new company and import gas at a lesser price.

The Minister pointed out that when the price of a gas cylinder was fixed at Rs. 1,493, the price of a barrel of crude oil in the world market stood at $362.

" Yet thereafter the gas prices in the world market rose and it was proposed by the Consumer Affairs Authority to increase the price of a cylinder by Rs. 217," he added.

“Thereafter, a meeting was held between the President’s Secretary, Finance Ministry Secretary, CAA and the State Ministry where it was discussed on another way of dealing with the matter. Instead of increasing the gas price by Rs. 217/-, the Trade Ministry agreed to remove the PAL tax of Rs. 60," he told the house.

The State Minister said Litro Gas owns a storage capacity of 8000 Metric Tonnes of Gas and during the import process the Omani company sends the consignment to the Maldives and from there it comes to Sri Lanka in smaller vessels.

"It was revealed that in the process of importing gas into the country, an extra cost of around US $ 70 - 100 is spent by Litro," he said.

The Government was focused on implementing a program by reducing taxes and through a joint purchasing mechanism without burdening the consumer.

However, both Litro and Laugfs as well as the supplier from Oman did not agree to it, said the State Minister.

Today, a metric ton of gas has increased to around $800, hence, we will have no choice but to increase the prices in the future, he told the Parliament.