Financial Times

Shell’s plans on hold

Shell Gas Lanka Ltd (SGLL) is reconsidering its investment strategy here after the recent ruling by the Fair Trading Commission (FTC) that the company says is unfair. The investment plans have been further affected by the increase in gas prices in the light of rising costs of living. Shell says the company is making every effort to cushion the price, which according to the agreed pricing formula would hit Rs. 700 per cylinder and continue to increase in the short term because of tensions over Iraq and the strikes in Venezuela.

"We are seriously concerned about the impact of such a ruling on our investment plans in the country. We had plans in place to further increase our investments in Sri Lanka this

year, both in the LPG industry and in other potential businesses, before this ruling was issued”, says Roberto M. Moran, Shell’s Country Chairman and Managing Director in statement to the media last week.

Shell refused to divulge specific investment plans, but such plans are believed to be in areas the company is involved in such as the petroleum sector, lubricants, solar power, etc.

Asked whether the company is considering pulling out of the country, Steven Bartholomeusz, Corporate Communications Manager at Shell said that it was too early to comment and such decisions would not be taken overnight.

The FTC recently issued an order to SGLL to pass on ‘potential interest income’ from cylinder deposits to consumers by January 15, 2003.

Shell has appealed against the ruling and is considering legal action. (AA)

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