LAUGFS Gas Director and Chief Executive Officer Nalinda Kurukulasooriya has stated that the decision to increase the price of LAUGFS gas was taken solely to recover costs and not to generate excess profits.

He explained that global market prices are determined according to the monthly prices published by Saudi Aramco, and that the prevailing war situation has added a cost of Rs. 706 to a 12.5 kg gas cylinder.

Key Points

  • Increase in global gas prices adds Rs. 706 to a 12.5 kg cylinder
  • Freight and insurance charges have added Rs. 417 while exchange rate fluctuations added Rs. 299
  • Factoring in VAT and financing costs, the price of a cylinder had to be raised by Rs. 1,775

How the price was calculated

It is reported that the surge in freight and insurance charges due to the war added Rs. 417, while exchange rate variations contributed another Rs. 299 to the overall cost.

In addition, he noted that the 18 percent VAT added Rs. 256, while financing charges for bank loans and letters of credit (LCs) accounted for Rs. 90. Accordingly, although the calculated cost increase stood at Rs. 1,769, the price of a cylinder was raised by Rs. 1,775.

Cannot sell at a loss

Nalinda Kurukulasooriya stressed that as a company listed on the Colombo Stock Exchange, they are accountable to shareholders as well as creditor banks, and therefore cannot continue to sell gas at a loss.

He further reiterated that this price revision was not a decision taken to inconvenience consumers or to earn profits.

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