Laugfs chairman turns on the gas against CPC

by Lalin Fernandopulle

[email protected]

Laugfs Gas Chairman W. K. H. Wegapitiya said the Ceylon Petroleum Corporation (CPC) cannot sell Liquid Petroleum Gas (LPG) when a Supreme Court decision was pending in a case filed against the CPC by Laugfs Gas.

Wegapitiya said the company will take legal action against the CPC if it decides to enter the LPG market before the court decision.

The Supreme Court issued an interim injunction on the CPC to sell LPG to Laugfs Gas up to July this year.

Laugfs Gas took legal action against the CPC last year for deciding to sell LPG to another company at a high premium.Laugfs Gas which is the only local player in the LPG market has been buying gas from the CPC for over five years.

Commenting on a newspaper report which stated that though the CPC had been selling LPG to Laugfs Gas at a concessionary price it had not passed on the benefit to consumers, he said the company buys LP gas according to the world market price which is around US$ 850 per metric tonne.

The Chairman said the CPC which initiated the LPG market in the country under the brand Colombo Gas Ltd. sold the company to Shell Gas Ltd. for a song. The CPC's decision to resume operations is meaningless.

CPC Chairman, Asantha de Mel said the court decision will be the final verdict and that the Chairman of Laugfs Gas cannot tell the CPC what to do.

"Laugfs Gas objected to the CPC decision to sell LPG to another party. It is up to the CPC to decide its growth.

We have been selling LPG to Laugfs at a concessionary rate for over five years", de Mel said.

Laugfs Gas buys LPG from the CPC at world market price and saves around Rs. 130 per LPG cylinder since it does not have to pay freight and unloading charges.

The CPC decided to enter the LPG market and sell gas at least 10 per cent less than the market price. The company which plans to gain a 10 per cent market plans to produce 1,000 mt of LPG and sell 8,000 cylinders. CPC produces 55MT LPGs per day at its refinery.

De Mel said by increasing production and selling it at a low price they intend to pass on the benefit to the consumer at a time when the price per cylinder is high.