Price hike on LPG inevitable - Laugfs Chairman

A price hike on a cylinder of Liquid Petroleum Gas (LPG) was inevitable due to the steadily increasing world crude oil prices and the demand for LPG gas, said Chairman, Laugfs Gas Holdings (Pvt) Ltd. W. K. H. Wegapitiya.

He was addressing the media on the price revision of a 12.5kg Laugfs LPG cylinder which came into effect from January 3.

Laugfs Gas Ltd. obtained approval from the Consumer Affairs Authority (CAA) to increase the price of a cylinder by Rs. 212. The revised price of a 12.5kg LPG Laugfs cylinder is Rs. 1,460.

The price revision of a LPG cylinder was based on the new formula pricing mechanism agreed between the (CAA) and the Laugfs Gas Ltd on December 28.

The pricing formula is based on the weighted Average Saudi Aramco Contract Price for the past two months/Mt, ocean freight/Mt, insurance/Mt, CIF value and terminal fee. Wegapitiya said since LPG is extracted from crude oil in the refining process its price depends on world crude oil prices.

The price of crude oil fluctuates as any other commodity during the year. The world LPG price increases with the approach of the Northern hemisphere winter and decreases to some extent during the autumn and summer.

Wegapitiya said world crude oil prices are expected to drop in March or April which will help dealers to reduce the price of LPG.

Laugfs Gas Ltd. purchases 35 per cent of its requirement of LPG from the refinery of the Ceylon Petroleum Corporation and the balance from the world market.

LF