Shell consumers to benefit from drop in oil prices

by Lalin FERNANDOPULE

[email protected]

The benefit of the decline in crude oil prices which affects gas prices in the world market will be passed on to consumers in line with the pricing formula agreement effective from January 1, said Finance Director and Country Controller, Shell Gal Lanka Ltd., Rimoe Saldin. He said the price revision will be subjected to approval by the Consumer Affairs Authority.

“The pricing formula operates with a lag. The surge or escalation in world crude oil prices is reflected in the domestic market with a delay. The formula takes into account freight charges, taxes and exchange rates”, Saldin said.

Shell imports 100 per cent of its LPG requirements and has no access to output from the Ceylon Petroleum Corporation refinery. The cost and selling prices will be higher than a company which is given LPG from the local refinery, he said.

Shell Gas Lanka owns 51 per cent of the shares in partnership with the government. The profits and losses accrue equally to the company and the government.

The company employs around 217 people of which a majority are Sri Lankans. Over 10,000 people benefit indirectly.

Saldin said Shell plans to inject another 100,000 cylinders in to the market this year. Shell introduced a safety cap for its cylinders to ensure more precaution. “Weighing scales have been installed in all sales outlets for consumers to verify the weight of gas cylinders”, he said.