Joint procurement of LPG via Siyolit to go ahead

• Govt. dismisses reports on dissolution of Siyolit 

The government plans to move ahead with the joint procurement of the required LP gas (LPG) supplies to the country through the newly-formed special purpose vehicle (SPV), Siyolit (Pvt.) Ltd. 

Dismissing certain reports on the dissolution of the entity, Co-Operative Services, Marketing Development and Consumer Protection State Minister Lasantha Alagiyawanna yesterday said that the joint procurement through the entity would remove inefficiencies in the process and could allow savings of Rs.125-130 on 12.5kg domestic LPG cylinder, which can be passed on to the consumer.

Sri Lanka’s duopoly LPG industry consists of state-owned Litro Gas, which caters to about 80 percent of the market and Laugfs Gas, which caters to the remaining 20 percent.

“The main purpose of this SPV is to procure the country’s LPG requirement. This would allow the country to procure a higher quantity, at a lower price,” an industry official told Mirror Business.

The board of directors of Siyolit, which includes three directors from Litro and two directors from Laugfs, has so far held three meetings. Former Ceylon Petroleum Cooperation Managing Director Susantha De Silva has been appointed as Chairperson of the entity.

It has been decided to commence joint procurement through Siyolit from November.

However, Litro Surakime Jathika Ekamuthuwa (LSJE) or Litro Surakeeme National Unity, a collective of employees and members of civil society formed to preserve Litro Gas, opposed the move, alleging it is intended to increase the market share of Laugfs, at the cost of Litro. However, Laugfs has denied these allegations.

As it was decided to supply LPG through  Laugfs  terminal located in Hambantota, LSJE feared that this would lead to an underutilisation of Litro’s bunkering facility in Kerawalapitiya. However, Laugfs argues that its terminal is more cost-effective.

The government has granted time to Litro Gas to submit its proposals and views on the matter, in order  reach a final decision. 

Sri Lanka’s monthly LPG demand is estimated at 50,000 MT. (NF)