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Govt considering importing gas in case of artificial shortage

COMMERCE, Consumer Affairs and Marketing Development Minister Jeyaraj Fernandopulle said yesterday that Emergency Regulations would be used to ensure a continuous supply of gas if the two LP Gas companies curtail the supply of domestic gas to the local market.

Fernandopulle said he was discussing with Ambassadors and High Commissioners of gas producing countries to explore the possibility of importing gas to prevent any artificial shortage, in case either company curtails their supply.

The Minister disclosed that discussions with those countries were fruitful and certain countries are prepared to supply gas to Sri Lanka.

He declined to divulge the countries that pledged to supply gas.

He said that since the Government doesn't have infrastructure facilities like the Shell Company to face this challenge, it was planning to pass special legislation for cross filling of gas to any cylinder if the gas suppliers resort to unethical trade practices.

Fernandopulle hinted he would not allow any gas hike in the future, though the authorities were looking at every possible option to assist those companies given the current economic conditions.

Consumers fear that a possible price increase could compel them to pay more than Rs. 1000 for a 12.5 kg domestic Shell gas cylinder which is now sold at Rs. 850. The price of a Laugfs gas cylinder too would be in the same range.

Shell Gas Lanka Ltd. said on Tuesday that the current selling price of a 12.5-kg domestic LP Gas cylinder is based on the average of August and September 2005 FOB import cost of US$ 417/mt.

The current cost of imports is even higher than the average of August/September 2005, by $165/mt. We are therefore incurring a loss of Rs. 64/= per 12.5 kg LP Gas cylinder only on the landed cost of product, the Company said.

The company also claimed that it has incurred losses in 2003, 2004 and 2005 amounting to more than Rs. 790 million.

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