Govt. to restructure LPG duopoly to maintain current prices

The Cabinet of Ministers this week approved several key measures to restructure the country’s duopoly liquefied petroleum gas (LPG) industry, in order to maintain the current LPG prices prescribed by the Consumer Affairs Authority (CAA).

Accordingly, state-owned Litro Gas Company and Laugfs Gas PLC are expected to purchase, transport and store LPG associatively by using the Hambantota Gas Terminal.

Further, a committee consisting of experts in the relevant fields, including representatives from the two LPG companies, is also to be appointed to carry out the procurement, transportation and storage affairs related to the purchase of the required LPG for the country.

The Cabinet approval also stipulated implementation of these measures within the next six months and to take the appropriate steps based on the progress. 

Trade Minister Bandula Gunawardana on Monday sought the approval of the Cabinet of Ministers for several measures recommended by the Ministerial Subcommittee to restructure the LPG industry in the country.

The Ministerial Subcommittee was formed with the approval of the Cabinet of Ministers on June 7 and it is headed by Gunawardana. The Cabinet of Ministers rejected a proposal a couple of weeks, where it was proposed that the state-owned Litro Gas Company to acquire 40 percent of Laugfs Terminal Limited, a fully-owned subsidiary of Laugfs Gas PLC.

Cabinet Co-Spokesperson Keheliya Rambukwella yesterday noted that the main purpose of restructuring the LPG industry is to maintain the LPG prices at current levels of Rs.1493 per 12.5 kg domestic gas cylinder. 

He stressed that the government would not allow the LPG prices to increase in the domestic market under any circumstances. 

At present, Litro Gas commands over 70 percent share in the country’s duopoly LPG market while Laugfs Gas serves the remainder of the market.