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Litro seeks LPG price increase amidst spike in global pricing



Rs. 1.5bn loss per month

By Suresh Perera

An increase in the price of Liquid Petroleum Gas (LPG) is now on the cards to offset a staggering loss of Rs. 1.5 billion per month incurred by Litro Gas Lanka in the backdrop of a spike in global pricing, which a senior industry official described as a “crippling blow”.

“We have to incur a loss of Rs. 700 on every domestic LPG cylinder sold in the market”, says Janaka Pathirathna, the company’s Director, Sales & Marketing/Corporate Affairs.

He said that the approval of the Consumer Affairs Authority (CAA) has already been sought to push up LPG prices, but there was still no formal decision on the matter.

Asked about the quantum of the price increase sought by Litro Gas, he replied, “Though we have indicated that a Rs. 700 loss is being incurred per domestic cylinder, it’s left to the government to determine the new pricing structure”.

Losses are steadily mounting as domestic cylinders account for the lion’s share of 80% of the total market, Pathirathna stressed.

“The more we sell, the more the financial losses we have to grapple with”, he complained.

Asked about industrial LPG cylinders, he replied, “We sell them at the procured price without a mark-up”.

He said that Litro Gas Lanka maintained stable prices for more than a year despite escalating global prices.

International LPG prices have now ballooned to US$ 600 per metric ton, he noted.

With the Covid-19 pandemic impacting markets across the world, coupled with currency fluctuations, international prices of LPG as one of the world’s most widely used energy sources have seen volatility.

According to Argus Independent Commodity Price Reporting Agency, the leading independent provider of energy and commodity price benchmarks, rising prices and uncertain economic forecasts overshadow the LPG industry globally.

The Argus pricing benchmark ‘Argus Far East Index’ is used widely in Asia, while Saudi Aramco Index is also used in countries such as Sri Lanka.

LPG is more than a commodity in Sri Lanka – it is an economic indicator that keeps home fires burning and multiple industries running, says Anil Koswatta, Chairman of Litro Gas Lanka,

“We understand the importance of passing on the economic benefit to the end-user as outlined in the government’s vision for the nation. As a result, despite currency fluctuations and LPG prices moving up worldwide, we have consistently maintained our prices in accordance with this vision”, he emphasized.

While it is difficult to predict the pricing structure due to external factors, global indicators such as fluctuating world LPG prices, currency fluidity and industry demand may result in price variations, Pathirathna said.

On the way forward for LPG markets amidst the pandemic, Argus Report says that growth is expected in 2021 resulting in spiraling prices possibly continuing until the end of the year. While seasonality will also drive demand, Argus Report also acknowledges that petroleum price reversals are likely to result in uncertainty of global LPG prices.

Industry experts affirm that while in the developing world, LPG is primarily used for domestic cooking, in the developed world, it is used widely for indoor heating.

“As the national LPG provider, Litro Gas Lanka understands the importance of stabilized pricing. However, rising international prices and enhanced international shipping and freight rates could further burden us”, Pathirathna added.

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Veteran singer and musician Professor Sanath Nandasiri passed away at the age of 81




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Overtime gravy train for public sector back



Govt. MPs make contradictory statements on state of economy

By Shamindra Ferdinando

UNP National List MP Wajira Abeywardena on Sunday (26) disclosed the issuance of a circular by the Finance Ministry to restore overtime and other payments in the public sector.

The declaration was made in Galle soon after Transport and Media Minister Bandula Gunawardane lamented that the government was short of billions of rupees to pay public sector salaries, pensions, Samurdhi payments and meet recurrent expenditure.

Minister Gunawardena and UNP National List MP Abeywardena addressed the local media after the handing over of several buses to the Galle SLTB depot.

Cabinet Spokesman Gunawardena said that the government needed as much as Rs 196 bn before the Sinhala and Tamil New Year and its projected revenue was Rs 173 bn. In addition to that Rs 500 mn was required to settle what Minister Gunawardena called bilateral debt.

Minister Gunawardane said that a part of the first tranche of USD 333 mn from the International Monetary Fund (IMF) would be utilised to pay public sector salaries.

Of the USD 333 mn received so far, USD 121 had been used to pay the first installment of USD 1 bn credit line secured from India early last year, according to State Finance Minister Ranjith Siyambalapitiya.

Power and Energy Minister Kanchana Wijesekera in the second week of August last year revealed as much as Rs 3 bn had been paid as overtime to Ceylon Petroleum Corporation (CPC) workers for several months. This disclosure was made in response to a query raised by Chief Opposition Whip Lakshman Kiriella.

One of the major demands of the public sector trade unions on the warpath over the Wickremesinghe-Rajapaksa government’s new tax formula is the restoration of overtime.

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Now, Opposition wants Finance Secy. hauled up before Privileges Committee



Prof G L Peris

Prof. G. L. Peiris yesterday (27) urged Speaker Mahinda Yapa Abeywardena to act speedily on the main Opposition Samagi Jana Balawegaya (SJB) request to summon Finance Secretary Mahinda Siriwardena before the parliamentary Committee on Ethics and Privileges.

Addressing the media on behalf of the Freedom People’s Alliance, the former External Affairs Minister said that the Treasury Secretary had challenged the parliament by withholding funds allocated in the budget 2023 to the Election Commission thereby sabotaging the election.

Prof. Peiris said that there couldn’t be a far worse violation of parliamentary privileges than a government official undermining Parliament.

Instead of appreciating the intervention made by the Supreme Court to facilitate the delayed Local Government polls, the ruling party had sought to challenge the apex court, Prof. Peiris said, urging Speaker Mahinda Yapa Abeywardena to fulfill his obligations.

Prof. Pieris said that if the government lacked funds, just one percent of USS 333 mn received from the International Monetary Fund (IMF) was sufficient to conduct the election.

The ex-minister said that the IMF wouldn’t oppose the utilisation of a fraction of the first tranche of USD 2.9 bn loan facility provided over a period of four years to guarantee the constitutional rights of the Sri Lankan electorate. (SF)

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