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Litro begins LP gas distribution in the country easing shortage

Litro Gas Lanka Ltd. says that it has begun the distribution of LP gas cylinders to their dealers countrywide with the aim of easing the current shortage.

Sri Lanka is facing a cooking gas shortage again after the key suppliers have said local commercial banks are not opening letter of credit (LCs) to facilitate imports amid severe dollar shortage.

The island nation’s cooking gas dealers say they have not received the adequate supply now.

The move comes as Sri Lanka’s forex shortage has worsened with lack of US dollars even to import essential commodities like gas and fuel amid expensive global commodity prices after the Russian invasion.

However Litro Gas Lanka Ltd. says a total of 120,000 cylinders of liquefied petroleum gas (LPG) were filled and distributed so far today at its storage terminal in Kerawalapitiya.

The process will continue for the next few days to ease the shortage in the local market, the company said further.

Earlier today, the Litro Gas chairman stated that issues pertaining to the opening of letters of credit and payment for liquefied petroleum (LP) gas were sorted out.

Accordingly, unloading, filling and distribution from the company’s storage terminal in Kerawalapitiya had commenced.

The two LP gas companies in Sri Lanka, Litro Gas and LAUGFS have been encountering issues in supplying the products as the banks were not allowing them to open letters of credit due to the ongoing US dollar shortage.

They also warned of a looming shortage in liquefied petroleum gas in the country as the stocks were expected to run out.

In many areas including Colombo, a number of restaurants and bakeries were compelled to remain closed for several days due to the shortage of LP gas in the market. Meanwhile, some restaurants had resorted to cooking using firewood.

However, on March 08, Litro Gas said a consignment of 2,500 metric tonnes of domestic liquefied petroleum gas was being unloaded from a ship to the storage terminal in Kerawalapitiya. Litro Gas also stated that two other ships carrying LP gas have entered the Sri Lankan maritime border.

Laugfs Gas, Sri Lanka’s only private LP gas supplier in the duopoly market, said there is only a little stock left at present .

“We will see a serious shortage. We have very little stock, only sufficient for one or two days in the port,” W K H Wegapitya, Laugfs’ Chairman, told Economynext.

Laugfs Gas controls around 20 percent of the LP gas market in Sri Lanka while the state owned Litro supplies 80 percent.

Laugfs needs on average 15-30 million US dollars per month to import gas, Wegapitya said.

“We have been supplying around 15,000 tons to the market per month but with this forex issue we are finding it difficult to continue the supply specially with commercial banks not opening letter of credits for us to import gas,” he said.

Laugfs had been able to continue it’s supply in the past month with the support of commercial banks that opened LCs for the company.

“With today’s situation, there will be another shortage of gas by next week,” he added.

Laugfs had also been re-exporting gas to Bangladesh, Africa and Maldives, but that also has been halted.

The island nation already suffered a LP gas shortage late last year after Litro changed the composition in gas which led to several explosions at household level, a commission report has said.

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