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CAA pushes for new legislation to regulate LPG composition in cylinders

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‘Lives of consumers should not be endangered’

By Suresh Perera

A top level Consumer Affairs Authority (CAA) team met with Attorney General Sanjay Rajaratnam last week to discuss the scope of enacting legislation to regulate the composition of Liquid Petroleum Gas (LPG) in existing cylinders and new products introduced to the market.

The move comes in the backdrop of the controversy over Litro Gas Lanka launching a new 18-litre product, which was described as a “violation of consumer laws”.

Despite the weight being reduced by three kilograms, the domestic 9.18 kg hybrid cylinder was priced Rs. 1,395 – a mere one hundred rupees less than the regular 12.5-kilogram cylinder.

“The butane and propane composition in cooking gas should be regulated for public safety”, says Thushan Gunawardena, CAA’s Executive Director.

It should be ensured that gas companies don’t endanger the lives of consumers by changing the composition for profiteering by ignoring possible risk factors of increasing propane in the composition, he said.

“We have sought to regulate the composition of LPG domestic cylinders under Section 18 of the CAA Act”, he told The Sunday Island.

Stressing on the immediate need for legal clout to “mitigate the risk factors typically associated with LPG composition”, Gunawardena has already written to CAA Chairman, Major General (Rtd) D. M. Shantha Dissanayaka, with copies to the President’s office, AG’s Department and State Minister Lasantha Alagiyawanna, calling for new laws to adequately scrutinize the LPG sector’s manufacturing process.

He said the Sri Lanka Standards Institution (SLSI) has received complaints that cylinder valves are leaking due to the composition change. This could pose a serious hazard and possible loss of life, if true.

Under Section 7 (a), the objects of the CAA shall be “to protect consumers against the marketing of goods or the provision of services which are hazardous to life and property of consumers”, Gunawardena further says in his letter.

“Therefore, we need to formally engage the SLSI to publish the required LPG standards as per Act No. 6 of 1984 and adopt the standard under Section 12 (2) of the CAA Act and publish a gazette informing adoption of the standard set by SLSI”, he continued.

“If we don’t take action to enact new regulations for the LPG sector to adequately scrutinize the manufacturing process, we are in contravention of the CAA Act for inaction by virtue as per in section 12 (1) & (2) of the Act”, he pointed out.

The composition of LPG in other countries is regulated. However, the composition varies from country to country and is generally decided by the climatic conditions, the CAA Executive Director explained, while adding that “we need to scientifically get the composition from SLSI or a similar institution for the best composition for Sri Lanka for propane+ and butane percentages that forms LPG”.

As far as available data shows, a propane rich mixture is used only in cold countries and a butane rich mixture is more suitable for tropical countries like Sri Lanka. According to reports, butane has a higher fuel value than propane and makes it ideal for domestic use as a propane rich mixture carries a risk during handing, Gunawardena noted.

On Wednesday, an extraordinary gazette notification was issued under the CAA Act No. 09 of 2003 directing all manufacturers and traders of LPG to ensure that adequate quantities of 12.5kg domestic cylinders are available for sale at all outlets island-wide.

“No trader who has in his possession or custody or under his control 12.5kg LPG cylinders shall refuse to sell or in any manner directly or indirectly compel consumers not to purchase such cylinders”, it warned.

Asked what prompted the special direction, Gunawardena said the CAA has received more than one thousand complaints so far about the non-availability of 12.5kg domestic cylinders in the marketplace.

What is the use of the CAA if it cannot do its job of regulating the market?, he queried. “A regulator serves no purpose if the system is allowed to be manipulated”.

“We need to push for a directive to prohibit the sale of 18-litre cylinders”, he emphasized.



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Pakistan’s ex-president, Pervez Musharraf dies aged 79

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(picture BBC)

BBC reported that Pakistan’s former president General Pervez Musharraf, who seized power in a coup in 1999, has died aged 79.

The former leader – who was president between 2001 and 2008 – died after a long illness, a statement from the country’s army said.

He had survived numerous assassination attempts, and found himself on the front line of the struggle between militant Islamists and the West.

He supported the US “war on terror” after 9/11 despite domestic opposition.

In 2008 he suffered defeat in the polls and left the country six months later.

When he returned in 2013 to try to contest the election, he was arrested and barred from standing. He was charged with high treason and was sentenced to death in absentia only for the decision to be overturned less than a month later.

He left Pakistan for Dubai in 2016 to seek medical treatment and had been living in exile in the country ever since.

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The 75th Anniversary of National Independence celebrated under the patronage of President, PM

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(picture Presidents Media)

The 75th National Independence Day celebration was held under the theme “Namo Namo Mata – A Step towards the Century”, under the patronage of President Ranil Wickremesinghe and Prime Minister Dinesh Gunawardena on Saturday morning (04) at Galle Face Green.

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Lanka sovereign bond holders write to the IMF

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ECONOMYNEXT –Sri Lanka’s bondholders have written to the International Monetary Fund expressing their willingness to engage in debt re-structuring talks but also raising matters related to the domestic debt re-structuring and economic assumptions and forecasts.

The group, styling itself as the “Ad Hoc Group of Sri Lanka Bondholders (the Bondholder Group) has written last week to the IMF Managing Director from New York said inter alia that the Bondholder Group through its Steering Committee stands ready to engage quickly and effectively with the Sri Lankan authorities to design and implement restructuring terms that would help Sri Lanka restore debt sustainability and allow the country to re-gain access to the international capital markets during the IMF Programme period.

The letter concluded with the paragraph: Recognizing the important commitments made by India in the India Letter, the Sri Lankan authorities will apply the principle of comparable treatment in respect of the debt relief requested and obtained from all their remaining official bilateral creditors.

Following is the text of the letter:

NEW YORK, Feb. 3, 2023

Dear Managing Director Georgieva,The Ad Hoc Group of Sri Lanka Bondholders (the “Bondholder Group”) acknowledges the Sri Lankan authorities’ engagement with their official creditors towards a resolution of the current crisis and restoration of debt sustainability.

The Bondholder Group further acknowledges that such engagement has recently resulted in the Government of India (in its letter to the IMF, dated January 16, 2023 (the “India Letter”)) delivering letters of financing assurances, committing to support Sri Lanka and contribute to its efforts to restore debt sustainability by providing debt relief and financing consistent with the IMF Extended Fund Facility Arrangement (the “IMF Programme”) and the IMF Programme targets indicated in the India Letter.

Similarly, the Bondholder Group through its Steering Committee stands ready to engage quickly and effectively with the Sri Lankan authorities to design and implement restructuring terms that would help Sri Lanka restore debt sustainability and allow the country to re-gain access to the international capital markets during the IMF Programme period.

Based on the limited information available to us at this time, including information contained in the India Letter, we understand that the IMF Programme’s debt sustainability targets are identified as

(i) reducing the ratio of public debt to GDP to 95% by 2032,

(ii) limiting the central government’s annual gross financing needs to GDP ratio to 13% in the period between 2027 and 2032, and central government annual foreign currency debt service at 4.5% of GDP in every year between 2027 and 2032 and

(iii) closing of the external financing gap.

The Bondholder Group hereby confirms it is prepared to engage, through its Steering Committee, with the Sri Lankan authorities in restructuring negotiations consistent with the parameters of an IMF Programme and the targets specified therein (the “IMF Programme Targets”), which the Bondholder Group understands to be the targets identified in the India Letter; it being recognized that these negotiations will necessarily be further informed by the receipt of the forthcoming DSA.

We would note that the finalization of an agreement will also be subject to the satisfaction of the following conditions:

The central government’s domestic debt – defined as debt governed by local law – is reorganized in a manner that both ensures debt sustainability and safeguards financial stability.

Assuming that annual gross financing needs should not exceed 13% of GDP in the period between 2027 and 2032, whilst allowing for central government annual foreign currency debt service to reach 4.5% of GDP in every year between 2027 and 2032, domestic gross financing should therefore be limited at 8.5% of GDP for the period 2027-2032.

While we recognize that the determination of the economic assumptions underpinning the IMF Programme Targets is ultimately the responsibility of the IMF and that the overall design of the IMF Programme is one that is negotiated between the IMF and Sri Lanka, it is nevertheless important that the Bondholder Group has the opportunity to express its views on both the economic assumptions underpinning these IMF Programme Targets and the adequacy and feasibility of the adjustment efforts contemplated under the IMF Programme.

When considering any restructuring proposal that is made to the Bondholder Group, it is the Bondholder Group’s intention to take into consideration the extent to which the economic assumptions and the adjustment efforts are consistent with these views.

Recognizing the important commitments made by India in the India Letter, the Sri Lankan authorities will apply the principle of comparable treatment in respect of the debt relief requested and obtained from all their remaining official bilateral creditors.

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