Gas distributors warn of transport crisis
Commanding a controlling stake of 73 per cent of the LP gas market, distributors of the state run Litro Gas on Wednesday warned of an impending crisis in its distribution in different parts of the country starting from Colombo unless their margin costs were increased by 12 per cent.
Raising awareness of their relevance the LP Gas Distributors Association President Sathyendra Wijayapura told a media conference that the margin for distributors and dealer for gas distribution, which had not been reviewed since 2007, be revised to 12 per cent with 7.5 per cent for distributors and 4.5 per cent for dealers.
In addition he noted that the transport margin needs to be amended to a minimum of Rs.7 per cylinder within Colombo and a sufficient increase for all other districts.
This would mean that the cost increase per cylinder would be Rs.75.
Mr. Wijayapura pointed out that distribution could get stalled starting from different parts of the country should the current crisis continue and their distribution costs continue to rise.
He explained that since the most distribution was to the urban areas and the highest concentration being Colombo it could be impacted first with the district running out of supply of Litro Gas.
The association noted that the key issue they faced was the significant increase in transport and related overheads due to the increase in the price of diesel to Rs.123, the increase in vehicle spare parts ranging from tyres to oils and high cost of human capital for what is a specialised job that requires regular training.
The President noted that attempts to have meetings with relevant authorities including Ministers Rishad Bathiudeen and Malik Samarawickrama had proved futile.
The Consumer Affairs Authority (CAA) is the sole authority capable of revising the rates and the margins in terms of gas distribution costs.
The last increase in the gas distribution cost was in 2015 when Litro granted an increase by 2.56 per cent that helped to cushion the margins for dealers and distributors.
On September 23 the association met with Litro Gas officials but they were yet to get back to them on a share in the profits.
The gas distribution network blames authorities for not heeding their call for a margin revision insisting that if the banks stop payments for loans in future they would be compelled to stop distribution.
Litro Gas which enjoys over 73 per cent of the market is servicing 4.3 million households in the country through its network of 35 distributors that transport gas cylinders on its 600 fleet of prime mover trucks daily.
Litro Gas has two state-of-the-art gas storage and filling plants based at Kerawalapitiya and Hambantota. The other LPG supplier is Laugfs. The CAA on Wednesday announced an increase in LPG prices to consumers.