‘Litro Gas incurring heavy losses as a result of not revising prices’
By Hiran H.Senewiratne
Litro Gas is now in a position to refill and distribute Laugfs LPG gas cylinders provided proper legal clearance is made. Litro Gas is incurring heavy losses and is about to exhaust its reserves, because it has not revised its prices despite the high world market price, a senior gas industry source said.
“Litro Gas now has an over 80 percent market share in the domestic gas market and if requested could meet the total demand of LPG cylinders. There is no major technical/safety issue in refilling/ crossing filling Laugfs with Litro. However, there is a legal issue as the Laugfs cylinder is not our property, the source said.
“Litro has grown its strength and could easily move in to fulfill the total domestic LPG gas requirement, president, LP Gas Distributors Association Sathyendra Wijayapura told the Island Financial Review.
Wijayapura added: “Our association could take over Litro Gas Company by investing in it to supply gas in an uninterrupted manner in keeping with Litro’s former multinational company, Shell’s, business model. We have funds to invest in Litro Gas but also need to import another 150,000 cylinders to manage operations.
“Laugfs Gas commenced operations 20 years ago, initially as an auto gas alternative before moving in to
LPG. Today, the heavily debt- ridden company owns tankers and a large LPG storage facility at Hambantota, widely seen globally as a non-performing asset, but finds itself at the center of controversy, brought on by the fact that the common platform recommended for the LPG industry is allegedly favouring Laugfs.
“Laugfs was also given approval to increase the price of domestic gas with the Consumer Affairs Authority approving the price of a Laugfs 12.5kg cylinder to be increased. But Litro Gas has not revised its prices for the last two years and when the Litro Gas price was revised two years ago one metric ton of gas cost US $ 350 and now it has increased to US $ 800 in the international market.
“Therefore, Litro Gas Company is making operational losses due to the LPG price hike in the global market. However, as a responsible company it is not out to put additional pressure on the public and would not look for an immediate price hike.
“Subsequently, Laugfs Gas Chief Executive Chaminda Ediriwickreme was quoted as saying that they have placed an order for a shipment and expect to re-start operations in a small way on August 20. However, this is yet to be a reality.
“We also want to say that it’s not practical to merge with Laugfs forming a new company and we oppose this move taking into account long- term distributing implications.
“We thank former Treasury Secretary and current Presidential Secretary Dr. P.B. Jayasundara for initiating the takeover of 51% shares of Shell Gas, who opted to move out of Sri Lanka in 2011. Dr. Jayasundara obtained these shares by taking US$ 61 million from Sri Lanka Insurance and Litro in turn paid back this amount in four years justifying this acquisition.
“To date Litro has paid a dividend of Rs. 13.5 billion and also Rs. 34 billion in tax to the government and is now about to go bankrupt and has no funds to even place the next purchasing order.
“It must be noted that 35 per cent of the customers in Sri Lanka use LPG as cooking fuel. Another 52 per cent of customers use dual fuel, one of which is LPG. For these customers and the industrial segment who rely heavily on LPG, the way forward is uncertain.”
SL needs laser-like focus on IMF programme implementation: Dr. Indrajit Coomaraswamy
‘If it gets suspended, it would have pretty dramatic consequences’
by Sanath Nanayakkare
There are three most important priorities for Sri Lanka in the wake of the IMF Programme; implementation, implementation and implementation of the agreed upon benchmarks of the programme. Last thing we need to suddenly find is that we have gone off the track of the programme and it is suspended, Dr. Indrajit Coomaraswamy, Former Governor, Central Bank of Sri Lanka said on Friday.
He said so while giving the keynote speech at a Central Bank hosted webinar titled “What is next for Sri Lanka in the wake of IMF Programme?”
Deshal De Mel, Economic Advisor, Ministry of Finance, Murtaza Jafferjee, Managing Director, JB Securities, Bingumal Thewarathanthri, Chief Executive Officer, Standard Chartered Bank were the panelists at the forum where the moderator was Shiran Fernando, Chief Economist at the Ceylon Chamber of Commerce
The following are a few comments made by Dr.Coomaraswamy.
The IMF EFF has now been successfully negotiated. This is in some way the beginning. There is lot more to do. It’s time to start thinking about what happens next. A little under a year ago, there were acute shortages of the most essential good. There were long queues and one or two people passed away while in queue. Prices were skyrocketing and exchange rate was collapsing, inflation was spiking and the Central Bank had to push up interest rates. All this happened only a few months from where we are today. The fact that things have stabilized to a significant extent clearly is a very favourable outcome but actually there is no room for complacency because the stabilization has happened at a low-level equilibrium.
It has happened when the economy experienced a 7.6% contraction last year. It was better than what was anticipated by the IMF and the World Bank, but still it is a very sharp contraction. And we need to get to a situation where we have macro-economic stability with a growth rate of about 4%. There is a lot to be done for this. But this is a very commendable place to get to after all. The Paris Club comprising G7 countries has endorsed our efforts to restore debt sustainability. The non-Paris Club creditors such as India and China also have endorsed and supported our efforts too. So the largest countries and creditors are willing to support Sri Lanka to get back on track in terms of debt sustainability. So this is not a bad place to be.”
“IMF programme implementation has always been a weakness on our part. This time we have already done a lot as prior action but there is more as you would have seen from the documentation tabled in parliament including structural reforms and institutional reform. So we have to have laser-like focus on implementation and move forward with the programme. If the programme gets suspended, it would have pretty dramatic consequences. So we need to keep it on track. We can’t give up the absolutely compelling need for fiscal discipline. What is next for us is; discipline and making the needed economic policy and implementing what e have agreed to do. During our past IMF programmes, the issue was lack of implementation by the Sri Lankan authorities.
Earlier this week Dr. Chandranath Amarasekare, Executive Director at the CBSL arranged for the Irish authorities to brief Sri lankan authorities on the implementation unit set up in Ireland when the global financial crisis hit Ireland which led them to go into an IMF programme. Ireland was meticulous in the way they set up the implementation framework. They identified all the action that had to be taken and assigned parts of it to relevant government entities to implement them. Ireland is back on track now. We need to have the same degree of laser-like focus on implementing the benchmarks. We have to figure out what needs to be done and ascribe responsibility for each action and monitor
carefully how we are going about it. We have to make sue we are hitting all the targets and structural benchmarks as we go along. These are embedded in the IMF programme. Last thing we need is to suddenly find that we have gone off the track of the programme and the programme is suspended. That will constrain the inflows to the country and it will affect the confidence beginning to build up now. All that will get undermined if the programme gets suspended because we are not able to keep it on track. So the Implementation Unit will need a very good authority to reach out to any part of government and get things done. We need this Implementation Unit to be well-structured and running well. And it should have the authority of the President behind it,”he said.
Exterminators PLC opens a training and R&D center
Exterminators PLC, Sri Lanka’s premier pest tech and environmental tech company, opened a 5,000 plus square foot training, research and development center to enhance the quality of service via in-depth innovation to create a circular economy inorder to meet the growing demand in environmentally sustainable public health pest management, agricultural pest management, livestock, plantation and landscape pest management, sanitation and disinfection services in Sri Lanka and emerging and developing markets. The facility includes simulated environments for training in pest management, termite management, mosquito management, sanitation and disinfection, health and safety for new recruits and continuous professional training and development for existing employees.
The company plans to provide training for international pest management professionals in emerging and developing countries as well as serve as a training facility for its strategic franchising partners in the region.
SLT-MOBITEL ‘Hosting Cub’ for MSMEs enables critical infrastructure and value-added hosting services
Understanding the importance of supporting Micro, Small, And Medium-Sized Enterprises (MSMEs) to drive growth and efficiencies, SLT-MOBITEL, the National ICT Solutions Provider is offering its Hosting Cub – Shared Web Hosting service catering to vital hosting requirements.
SLT-MOBITEL provides hosting facilities for MSMEs with affordable pricing, easy expansion of MSMEs cyber presence and other value-added offerings via its Shared Hosting and Virtual Private Server (VPS) solutions.
The Shared Hosting proposal is offered as the most economical option available for hosting. The overall cost of server maintenance is shared, also catering to low traffic websites that do not require higher bandwidth such as smaller websites and blogs.
The Share Hosting solution is available via four levels – Stellar, Stellar Plus, Stellar Pro and Stellar Business. The ‘Stellar’ package 1 GB VSAN Disk Space to balance storage usage, monthly 20 GB Bandwidth, 2 Mbps speed, 10 websites allowed, secure connection through SSL, FTP Accounts to manage file transfers, Unlimited email accounts, Unlimited MySQL Database to manage data, Unlimited Sub Domains, Hosting in SLT’s state-of-the-art Data Centre and WordPress supported. The pack is priced at only Rs 7500 per annum.
Similarly, the Stellar Plus presents an enhanced package with 2 GB VSAN Disk Space, monthly 40 GB Bandwidth, approval of 15 websites in addition to all the other value-additions. It is priced at Rs 12,000 per year. The Stellar Pro delivers 3 GB VSAN Disk Space, monthly 100 GB Bandwidth and 30 websites allowed while the Stellar Business provides 5 GB VSAN Disk Space, monthly 150GB Bandwidth and 40 websites. All other features are also enabled. The costs for Stellar Pro and Stellar Business are Rs 16,500 and Rs 25,500 respectively, per annum.
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