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Refilling spat takes on new turn

By Channa Kasturisinghe

While the controversy over using empty cylinders of other manufacturers for refilling has taken on a new turn, several consumers are willing to take the option of refilling their cylinders with Mundo Gas which would be sold about Rs. 125 below the prices of its competitors

Laugfs Lanka Gas (Pvt) Ltd has been successful in obtaining an Enjoining Order from the Colombo Commercial High Court effective until March 14 preventing Mundo from refilling Laugfs gas cylinders.

According to a Company spokesman, Shell Gas Lanka Ltd. (SGLL) would also seek legal action against a possible attempt by Mundo to refill Shell gas cylinders. Meanwhile Mundo Gas is planning to enter the local gas market within the next two weeks.Mundo Gas Ltd, Chairman Ariyaseela Wickramanayake told the Daily News yesterday that his Company, would refill any empty cylinder brought to them by the consumers if it was not in contravention of the law.

"If the objection is about who would take the responsibility of the safety of the consumer once Mundo refilled a cylinder distributed by another marketer we can repaint the cylinder or use a sticker to indicate that it was refilled by Mundo Gas Ltd," Wickremanayake said.

He said his company is planning to distribute 100,000 empty cylinders to consumers who are willing to buy Mundo gas.

"We will not restrict any company from refilling our cylinders. It should be the consumer's choice," Wickremanayake said.

However, consumers are still not certain whether they will be able to get their empty cylinders refilled with a cheaper gas by a different company other than the company from which they bought the cylinders. A consumer has to invest a considerable amount of money on an empty cylinder they prefer getting their cylinders refilled with a cheaper gas than investing on another cylinder.

At present, SGLL takes a deposit of Rs.2,150 for a new empty 12.5kg cylinder. This deposit has two elements. One is the refundable deposit of Rs. 1,110 and the other is the non-refundable deposit of Rs.1000. LLGL also sells an empty cylinder at Rs.2,150 and consumers cannot recover the full amount if they want to return their cylinders.

According to LLGL Chairman W. Wegapitiya if a consumer returns a cylinder within one year the non refundable element will be Rs.300. "If a cylinder is returned after two years we retain Rs. 900," he said. When the Daily News inquired from an official of the Fair Trading Commission (FTC) he refused to make any comment on the matter.

However, the FTC recently determined that SGLL's practice of refunding only part of the cylinder deposit when a cylinder is returned compels the consumer to be tied-down to SGLL and restricts the freedom of the consumer to change to another supplier. SGLL has sought legal action against the determination of the FTC.

According to SGLL Country Chairman the owner of the cylinder is the Company and that the deposit is only meant for the use of the cylinder, and it is the Company policy to retain a portion of the cylinder deposit as non-refundable when the consumer surrenders the cylinder to SGLL. He also said that the non-refundable deposit is meant for maintenance of the cylinder.

However, the Commission pointed out that the selling price of a cylinder of LP gas is inclusive of the maintenance cost of a cylinder under the item of `operating cost', which is a component of `company recovery' in the pricing formula for the sale of LP gas. The FTC has considered the effects of this conduct by the SGLL on the prevalence of competition, consumer choice and public interest.

The Director of Intellectual Property D.M. Karunaratne told the Daily News that the matter is too complicated and it needs a fair amount of consideration. "When it comes to the case of a bottled beverage most of the time a bottle itself is a registered trade mark. If somebody uses that same bottle for a commercial purpose it is an illegal act. We must ascertain whether the same principle is applicable to empty gas cylinders," Karunaratne said.

 

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