LAUGFS Gas PLC yesterday announced the suspension of operations of its Dubai-based subsidiary, Slogal Energy DMCC, following its designation by the U.S. Department of the Treasury for allegedly trading in Iranian-origin petrochemical products.
The company, one of Sri Lanka’s largest liquefied petroleum gas (LPG) suppliers, said it had launched a comprehensive compliance and legal review in collaboration with U.S. sanctions counsel to ensure full adherence to international regulations.
“LAUGFS Gas reaffirms its unwavering commitment to integrity, transparency, and adherence to international regulatory frameworks,” the company said in an official statement.
The U.S. Office of Foreign Assets Control (OFAC) last week accused Slogal Energy of purchasing and selling Iranian LPG shipments to Sri Lanka and Bangladesh through a network of intermediaries, including UAE-based and Hong Kong-based trading entities.
However, LAUGFS strongly denied any intentional violation of international trade sanctions, asserting that all Slogal transactions were supported by certificates of origin and Know Your Customer (KYC) documentation confirming legitimate sources of supply. “Slogal Energy has never knowingly engaged in, or facilitated, any trade involving sanctioned entities or products of sanctioned origin,” the company stated.
According to OFAC, Slogal Energy and UAE-based Markan White Trading Crude Oil Abroad Co. L.L.C. were key intermediaries in facilitating sales of Iranian LPG, allegedly on behalf of Iranian petrochemical broker Persian Gulf Petrochemical Industry Commercial Co. (PGPICC). The network reportedly used multiple entities including Amita Petrochemical Trading L.L.C., Ravenala Trading Co., and AIX Company Limited—to channel payments exceeding $100 million between 2024 and early 2025.
OFAC further linked the transactions to shipments made aboard vessels such as the MAX STAR and GAS DIOR, which delivered Iranian LPG to Sri Lanka and Bangladesh. Several of these vessels and their management companies were simultaneously designated under Executive Order 13902 for operating in Iran’s petroleum sector.
Despite these developments, LAUGFS emphasized that its domestic gas distribution business in Sri Lanka remains unaffected and continues to operate independently of Slogal’s international trade activities. The company said it intends to petition for the removal of Slogal Energy DMCC from the U.S. Treasury’s Specially Designated Nationals (SDN) list.
Industry analysts said the development comes at a time when Sri Lanka’s LPG market is already under pressure due to rising import costs and volatile global energy prices. LAUGFS, alongside its main competitor Litro Gas, plays a vital role in maintaining the nation’s energy supply chain.
If sanctions-related complications persist, industry observers warn that Sri Lanka’s LPG import logistics and price stability could face short-term disruptions. LAUGFS has reassured consumers that it remains committed to regulatory compliance and business continuity in Sri Lanka.
