By: Staff Writer
Colombo (LNW): The Government has decided to approve to purchase of 50 percent of the total supply stipulated in the 2024-2025 contract from the current supplier as a reorder of LP gas to ensure uninterrupted distribution in light of the ongoing restructuring process at Litro Gas Lanka.
It has short-listed transaction advisors to assist in the divestiture of Litro Gas Lanka Ltd including Litro Gas Terminals Ltd (LPG retailing).
For Litro the shortlisted advisors are Asia Securities, Capital Alliance, Platinum, Deloitte, PwC and NDB.
In the wake of divestiture of Litro Gas Lanka, the proposal to extend the LP Gas procuremnet to the present supplier reducing the quantity to 50 percent was presented by President Ranil Wickremesinghe in his capacity as the Finance Minister was approved by the Cabinet of Ministers.
The company’s contract for the supply of 280,000 tons of LP gas set to conclude on 31 December 2023, has prompted authorities to consider a strategic approach to maintain an uninterrupted gas supply.
Sri Lanka’s LP Gas shortage has been handled effectively with the procurement of 280,000 MT of LP from an Oman company OQ Trading last year.
Litro Gas Lanka has taken every necessary actionat that time to provide LP gas filled cylinders to consumers via its network consisting of 42 distributors, approximately 14,000 point-of-sale locations and 1,500 home delivery hubs, a company official said.
“The present plan involves the purchase of 50% of the total supply stipulated in the existing contract from the present supplier as a re-order.
This move is intended to adhere to the Government’s procurement guidelines while also ensuring that the ongoing restructuring process remains unaffected,” Co-Cabinet Spokesman and Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing.
Noting that Litro Gas Lanka’s restructuring process has already begun, he said it appears that signing additional agreements could hurt the streamlining process.
“This strategic manoeuvre is poised to safeguard both the interests of consumers and the successful completion of Litro Gas Lanka Company’s restructuring process,” Gunawardena added.
. As the national LPG provider, Litro Gas has a share of over 90% of the market. Industrial sectors such as the tile industry, confectionaries, rubber, glass, and the hospitality sector depend on LPG. As such, Litro has been key to Sri Lanka’s growth for over a century.
Litro Gas was amongst the many organisations that had to contend with a plethora of challenges.
Apart from the dollar shortage, the implementation of short-sighted policy meant that a once profitable organisation was now riddled with debt whilst suffering from major losses.
With the appointment of Muditha Peiris who served as the Managing Director of Litro on June 15, 2022, as the new Chairman of the company, the state-run gas supplier and Litro Gas Terminal Lanka (Pvt) Ltd have been turned round to a profitable venture.
