LP Gas Distributors Association of Sri Lanka (LPGDASL) says that they need a revision in prices for transport and other overheads with immediate effect as their service costs have gone up.
President, Sathyendra Wijayapura, LPGDASL told Daily News Business that the last revision was made in 2007 and 2012. The key issue evolving the distribution of Gas is the present Channel Margin ( for distributor and dealer) which is not reviewed since 2007 while the District wise Transport Margin was never addressed similarly except once in 2012 on a small scale.
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| Sathyendra Wijayapura |
Diesel Prices have gone up by Rs 23 since April this year (2018) and it is a 24.21% increase. Furthermore, the Government increased the price of 4 star Diesel again in the end of July by another one rupee. The future vehicle standards being “Euro 4”, all the trucks that transport gas would have to shift to Euro 4 Standard in time to come and then the distributors will have to incur a further burden on the price.
In addition due to the rupee depreciation inputs needed for distribution process such as tyres, spare parts, lubrication service costs, lubrication oil costs and the financial costs for bank borrowing, leasing, safety gear and fire control equipments, has also increased.
“Distributors find it extremely impossible to continue their operations due to the extensive out flow of finances and the most difficult part is the retention of trained staff who would seek alternative employment in the absence of solutions to their grievances,” he added.
Wijayapura said that due to this distributors are reluctantly compelled to downsize the deliveries if this issue is not addressed immediately as every day that passes without a sufficient margin and a transport margin (based on the fuel hike/depreciation of the rupee) would push them to a severe financial crisis which would result in an acute shortage of gas to households, industries, tourist hotels and even for crematoriums.
“Various representations made to the LITRO Gas Lanka Limited have not helped in finding a lasting solution.”
LITRO GAS says that the decision in this regard has to be taken by the CAA and has to be approved by CAA.
The CAA says that they are still studying this issue.
Liquid Petroleum Gas (LP gas) is the most popular, convenient and economical energy source in the domestic and commercial cooking in addition to the industrial, hospitality trade and agricultural (animal husbandry) use on a commercial basis. At present over 5.5 million households use LP gas as the main cooking energy and there are two brands that is Litro Gas and Laugh Gas. Litro Gas enjoys over 73% of the market which is over 4.25 million households. (SS)
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