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Litro Gas grappling with billions of rupees in losses as govt. still undecided on LPG price hike

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by Suresh Perera

With staggering losses running into Rs. 3.8 billion (Rs. 3,800 million) over the past three months, Sri Lanka’s biggest importer and supplier of Liquid Petroleum Gas (LPG) is in the throes of a grave financial crisis as the government continues to dilly-dally on the demand for a substantial increase in the price of cooking gas.

“There’s no option other than to absorb the mounting losses as no price revision has been granted so far”, says Anil Koswatte, Chairman/CEO of Litro Gas Lanka.

“We are facing an uphill task in continuing operations amidst the financial difficulties”, he noted.

LPG prices zoomed in the global market over the past quarter with a ton selling at a new high of US$ 600.

“There’s a ray of hope now that international prices will reduce further”, Koswatte said, referring to the marginal dip over the past week with pricing per tonnage settling at US$ 539.

Litro Gas has sought a Rs. 700 increase per domestic cylinder in a desperate bid to at least cover procurement costs, but the government go-ahead has still not been forthcoming, a senior official said.

“The more people buy cooking gas, the more the losses we suffer as 700 rupees are lost on every cylinder purchased”, he explained.

Litro’s biggest marketing segment is the domestic household market, which translates into 83% of total sales.

Asked whether a government bailout has been sought as, with billions of rupees in accumulated losses, Litro Gas was being pushed towards a cash crunch, the Chairman said that as a company, Litro Gas cannot expect a subsidy from the Treasury.

“Anyway, we are trying to work out some relief and a meeting has been scheduled to examine the possibility of tiding over the situation”, Koswatte noted.

In terms of the law, Litro Gas, though a private company, cannot increase the price of domestic LPG cylinders without the approval of the Consumer Affairs Authority (CAA). However, industrial LPG cylinders are excluded from the price control mechanism.

There’s still no word from the government on the price revision on domestic gas cylinders that was sought about two months ago, a senior official said.

“Even if a price increase is finally granted, we won’t be able to recoup our losses”, he pointed out.

It is true that at a time the government has come under fire over the spiraling cost of living, increasing the price of cooking gas will make a bad situation worse, he admitted.

However, there should be a level playing field for companies also to remain viable to continue their uninterrupted services to the public, he reasoned.

Sri Lanka Insurance Corporation (SLIC) is the primary shareholder of Litro Gas Lanka Limited with 99.94% shareholding.

The impact of a LPG price hike will reflect across the board with low and middle income groups having to bear the brunt of it as a range of food items, from the ordinary man’s buth packet to flour-based products such as stringhoppers, roti, pittu and hoppers going up in price.

As even wayside eateries now depend on cooking gas, a price revision of food items will be inevitable, industry players said.



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CAA reverses decision to file legal action against Litro Gas

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For introducing controversial hybrid LPG cylinder

by Suresh Perera

The Consumer Affairs Authority (CAA) has backtracked on moves to file legal action against Litro Gas Lanka for launching 18-litre premium hybrid domestic LPG cylinders in contravention of consumer laws.

The Chairman was not in favor of moving court on the matter due to political pressure, a senior CAA official said.

The move to desist from legally challenging Litro’s launch of the new hybrid cylinder to the market without the regulator’s approval comes in the backdrop of State Minister Lasantha Alagiyawanna’s intervention to allow the controversial product to be sold to consumers at its introductory price of Rs. 1,395.

“What’s the purpose of a regulatory body if politicians can interfere with CAA’s legally mandated functions to protect the interests of consumers?”, the official asked.

The selective application of the law will boil down to seeking approval from politicians on whether legal action should be instituted when even a grocery store is raided for violating regulations, he said.

“The law is the same, and if are to take punitive action by favor, then the CAA will be a dead duck bowing down to political dictates”, he opined.

Litro Gas has come under fire for introducing new hybrid domestic cylinders for Rs. 1,395 in spite of the weight being reduced by three kilograms in comparison to the regular 12.5 kilogram cylinders priced at Rs. 1,493.

“We have already received hundreds of complaints about a shortage of 12.5kg cylinders in the market as Litro is trying to push its new hybrid cylinders”, the official said.

“This is unethical”.

A resident of Kirillawala in the Gampaha district complained that only hybrid LPG cylinders were available over the past few days.

“I was told by the Litro dealer in the area that stocks of 12.5kg regular cylinders will not be received for some time”, he said.

However, Litro Gas Chairman/CEO, Anil Koswatte assured that there was no dearth of LPG in the marketplace.

When told that technically there may be no shortage of cooking gas, but on whether regular 12.5kg regular cylinders were also available apart from the new 18-litre premium hybrid product, he said that there may be delays in deliveries due to the prevailing situation, but both domestic cylinders are freely available.

Consumers can also order online or by calling 1311 for delivery, he said.

The LPG production process is continuing uninterrupted despite many challenges posed by the pandemic. Workers adhere to health safety regulations and are regularly screened and provided accommodation to prevent contact with outsiders who may be infected, he continued.

With ballooning global LPG prices, Litro Gas Lanka incurs Rs. 300 to 400 million in losses per day as the government has turned down an appeal for a Rs. 700 price increase on domestic cylinders.

The new hybrid 18-litre domestic cylinder was introduced to the market to cut losses as LPG is now sold below procurement cost.

Asked about the claim in a YouTube video shared on social media that he draws a remuneration of Rs. 3 million per month at a time Litro is facing a financial crunch, Koswatte declined to comment on what he termed as “gossip to sling mud at him”.

The presenter of the YouTube program, Chapa Bandara, claimed that Koswatte draws a monthly salary of Rs. 2 million from Litro Gas Lanka Limited and Rs. 1 million from Litro Gas Terminal Lanka Ltd.

“I am not paid with government funds”, he noted, while pointing out that both are private companies.

“My salary is a matter for the shareholders to decide on”, he stressed, while adding that his salary should not be of concern to anybody as it’s purely a private matter.

The Chairman said that if he responds to tittle-tattle, it will create the impression that he also thrives on gossip.

Presenter Bandara also asserted that a woman who served as the General Manager at the time Koswatte was Chairman of Laksala has been appointed Director (Human Resources) of Litro Gas.

 

 

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Allied Security Services to reward officer who foiled Rs. 10.7mn robbery

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Timely action by a security officer on duty at a private bank in the Anuradhapura New Town thwarted the robbery of Rs. 10.7 million by a two-member gang on Thursday morning.

The officer risked his life to prevent the gangsters from escaping with the cash during the heist, an official said.

An officer of a different security agency had alighted from the vehicle and walked towards the ATM with a representative of the bank to reload cash into the machine when two persons lurking in the vicinity had thrown chilli powder and grappled with them in an attempt to grab the bag containing the cash, he said.

They had, however, fought back, and in the melee, the bag had slipped to the ground. The security officer, who was near the entrance to the bank, had promptly run across, picked up the bag and taken it into the premises, he noted.

Sensing they had lost the chance of robbing the money, the gangsters had escaped on a motorcycle before the police arrived, the official said.

A security officer of the company entrusted with reloading cash to the bank’s ATMs was injured when his gun went off by accident during the confusion, he said. “He was admitted to the Anuradhapura General Hospital”.

The brave security officer, whose resourcefulness prevented the money from being snatched, was identified as S. R. K. Somarathne of Allied Security Services (Pvt) Limited. He is a resident of Hidogama in Anuradhapura.

“We will be rewarding this valiant officer who foiled the robbery in spite of the grave risk to his life”, a senior official of Allied Security Services, said. (SP)

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Police round up unmasked persons in public spaces in Colombo

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With the alarming spike in Covid-19 infections across the country, Police on Friday launched an operation in Colombo to round up unmasked persons in public spaces.

Police said that 85 people taken into custody were initially taken to the Bo-tree junction in Pettah, where DIG (Colombo Division) Jagath Chandrakumara, gave them a brief lecture on the risk of not adhering to health safety guidelines.

They are not only placing their lives on the line by ignoring corona preventive guidelines such as wearing a mask and maintaining physical distance, but also jeopardizing others by spreading the virus, he said.

Police said that 85 persons taken into custody were later transported in buses to the Pettah police station, where they were granted police bail. They will have to appear in court when notified.

The operation was conducted under the supervision of DIG Jagath Chandrakumara, SSP (Colombo Central) Nishantha Chandrasekara, SSP (Colombo Central 1) Samarakoon Banda, Pettah Acting OIC Chief Inspector Abeyratne and Dam Street OIC Chief Inspector A. P. Paduruarachchi on the direction of senior DIG (Western Province) Deshabandu Tennakoon.

 

 

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