Sri Lanka is to purchase gas from a European supplier under favorable conditions in accordance with a new contract which is being finalised in a week, local gas giant Litro Gas said today.

Litro Gas Executive Chairman Shalila Moonasinghe told a media briefing that the old contract with Oman Trading International, a Middle East Based company, had ended on May 31. The previous contract he said was unfavorable towards the country as there were no provisions in the contract to demand an extra fee for supply delays and to file legal action. The most striking factor about the contract that just expired Mr. Moonasinghe said was that Sri lanka had to purchase a tonne of LPG at US $ 135 though the market rate was stagnant at US $ 110 for the last two years.

“Unfavourable deals such as these have contributed immensely to the staggering loss of Rupees one billion during the last two years,” the Executive Chairman said, adding the company cannot assure further price reductions although the new contract brings cost savings as it would be essential to focus on reducing the staggering losses incurred during the last two years. But he also assured that there would be no price hikes in the near future, while adding that there was no shortage of gas in the country as they had enough supplies at the moment. He said a temporary shortage was created by some who had stocked gas, fearing such a shortage would occur.

Meanwhile Mr. Moonasinghe accepted that the company was distributing free gas cylinders in some parts of Colombo as a promotion and said this would be expanded to other parts of the country as well.(Yohan Perera & Darshana Sanjeewa)