New entrants close shop leaving consumers:
Laugfs calls for proper entry mechanism
Laugfs Gas Chairman called on the Government to have a proper entry
mechanism for new players who enter the gasoline business.
Laugfs Gas Chairman W.K.H Wegapitiya
Picture by Sumanachandra Ariyawansa.
Chairman of Laugfs Holdings Limited W. K.H Wegapitiya said there
should be more players in the industry but new players who enter the
market recently could not survive in the market.
“Due to these fly-by-night players many consumers faced
difficulties,” he told a media briefing yesterday.
“There were two companies who entered the market recently saying they
could provide LPG at a cheaper price but these companies failed to
sustain in the business.
“There are no entry barriers in the industry.
“The Government and the authorities need to make sure that these new
entrants have continuous supply sources to operate in the business,” he
“New entrants need to have minimum infrastructure such as storage
facilities, minimum number of cylinders, ship loads and bowsers before
they enter the market.
“The Government has to focus on these issues for sustainability of
new companies and for consumer protection,” he said.
Meanwhile, Laugfs Gas announced a price revision of a domestic LPG
cylinder with effect from today. Wegapitiya said the new price of a
domestic LPG cylinder will be Rs. 1465.
“We entered into an agreement with the Consumer Affairs Authority (CAA)
for a “Formula Pricing Mechanism” last year as a result of a court
ruling to make our business viable.
“The new price revision has been done according to this pricing
“This is an important parity price mechanism where consumers will
have the benefit of enjoying a price reduction. International gas
prices, exchange rates, total product cost, port authority levy, total
landed cost are some basic elements of the pricing formula.
On the gas prices, Wegapitiya said during the winter season gas
prices peak high. In summer prices come down. However the highest gas
price was recorded last year and there was a sudden price hike last
We predict that gas prices may come down in March where the company
could pass on benefits for its customers, he said.
“The Government has already provided tax concessions for LPG imports
and nearly 30 per cent of the population is consuming LPG gas in Sri
Laugfs will be investing US$ 20 million on a storage facility in
Galle and construction work on the project is scheduled to be completed
within two years. This will help the company to reduce the total cost
and increase the storage capacity.