Says move due to delay by authorities to revise prices upwards
Temporary halt will lead to short-term interruption of supplies
To lobby further with authorities to return to biz
Says subsidiary companies will continue with their normal businesses without any interruptions
LAUGFS Gas PLC yesterday finally admitted the decision to temporarily suspend the import and distribution of liquefied petroleum gas (LPG) and warned of a likely shortage in the local market.
It said the move was due to the delay in authorities agreeing to an upward price revision in tandem with spikes in the global LPG market and freight cost.
Yesterday’s announcement comes after the company two days ago denied newspaper reports that it had taken an official decision to stop LPG imports. The original denial was after the CSE imposed a trading halt on the shares of LAUGFS Gas. LAUGFS Gas Chairman W.K.H. Wegapitiya in comments to Daily FT also denied speculation that the company was suspending imports.
LAUGFS’ move also comes after the Government on Tuesday assured that there would be no shortage of LPG and that prices would not be increased despite world market rates having risen sharply. Separately, the State-run Litro Gas said it had sufficient LPG stocks to meet demand and that it would provide gas to all types of cylinders in any colour.
In its filing to the Colombo Stock Exchange (CSE) yesterday, LAUGFS Gas said the firm had been in discussion with the relevant authorities over a period of time to obtain a revision of domestic LPG prices to be provided under a fair pricing to compensate with the increased landed due to the escalated world market prices.
It said as the decision of the authorities has been delayed and is still pending, the company has been compelled to temporarily suspend the imports and distribution of LPG for domestic usage.
The firm said it will use its best endeavours to continue to negotiate with the authorities to resume supplies of domestic LPG at its earliest.
The consent of the authorities is required for revision of domestic prices of LPG since it had been gazetted as an essential commodity as per Consumer Affairs Authority Act No. 09 of 2003.
Despite the temporary hiccup, the subsidiary companies of LAUGFS Gas which are contributing substantially to the turnover of LAUGFS Gas Group will continue to engage with their normal business activities without any interruptions, the statement added.
Post-announcement, LAUGFS Gas shares closed 70 cents or 3.3% down to Rs. 20.20.
(FT)