Stop CPC from selling LP gas: Laugfs tells President

Laugfs Gas (Pvt) Ltd has requested President Mahinda Rajapaksa to direct the Ceylon Petroleum Corporation not to go ahead with its plan to sell its brand of LP gas at a lower price. The move came after the CPC disclosed this week that it would be venturing into the local LP gas market as a means of providing consumers with a cheaper alternative for the high priced LP gas being presently sold in the country.

At present 30% of Laugfs gas stocks comprise CPC gas imports purchased at a price lower than the international market prices while the rest of its stocks are imported at the usual price. Laugfs Gas Chairman W.K.H. Wegapitiya said if the CPC utilizes its imports to market its own product then Laugfs Gas would have no choice but to import 100% of its base product causing retail prices to soar.

“The benefits we receive by using CPC imports is passed to the consumers and that is why Laugfs sells its products at a lower price than Shell. However, if the CPC goes ahead with its plan then Laugfs prices will be on par with Shell,” he said. Mr. Wegapitiya said similar attempts were made by different companies to compete in the Sri Lankan LP gas market but it ended up leaving more than 10,000 customers high and dry.

“No one can sell gas at a cheaper price than what is available now because the two competitors have narrowed down their profits to sell LP gas at the lowest possible rates,” he said. At present a domestic cylinder of Laugfs gas sells at Rs. 25 lesser than a cylinder of Shell gas. Mr. Wegapitiya said before such a venture the CPC should first have the infrastructure in place for the storage of 2,500 metric tones of gas, 10,000 cylinders and distribution and supply arrangements.

“While complaining about the growing losses to the CPC, I don’t know how it can afford such a large investment that is why I alerted the President of this problem,” he said. The CPC which sold LP gas under its own brand some years ago, handed over the business to the Lanka Gas Corporation which in turn sold it to Shell Gas Lanka Ltd due to its inability to manage the business.

Mr. Wegapitiya said he feared this time too it would end up as another failed attempt by the CPC to enter Sri Lanka’s LP gas market.Meanwhile CPC Chairman Ashantha De Mel was confident the CPC would be able to sell its product at a cheaper price so that consumers would be granted some form of relief to counter the rising cost of living.

“We hope to launch our project in the next few months and sell it at a special discounted rate mainly targeting low income families and Samurdhi beneficiaries,” he said. Mr. De Mel said he was unaware of any intervention by the President to halt the operation as he believes the CPC product would be beneficial to the people already swamped by the rising prices on fuel.