Benefit of lower gas prices passed on to consumers - Trade Minister

Irangika Range

Colombo : Gas prices in the world market have gone down in February and March 2008 and the Government has granted this relief on the evaluation of the pricing formula agreements aiming to provide gas at lower prices for consumers in May and June, said Trade, Marketing Development, Co-operative and Consumer Services Minister Bandula Gunawardana.

Addressing the Media, Minister Gunawardena said yesterday that a 12.5 kg cylinder the price of a domestic gas cylinder was priced at Rs.1729 from May 1.

This price reduction of Rs. 20 will be authorised for months of May and June with the objective of passing the benefit of reduced prices to consumers.

The Supreme Court has ordered the Consumer Affairs Authority (CAA) to prepare the price formula and according to this formula the gas prices can be changed six times within one year. The appointed price committee in the CAA discuss with each parties concerning technical and practical impacts to decide the price formula once and when needed the price has to be revised according to the fluctuations in gas prices in the world market.

The prices are being evaluated by the Committee under the Saudi Aramco price index. It has decreased in February and March compared to January.

It was the reason for this price reduction, he said.

Though the Shell Gas Company said it reduced the price by Rs. 20 for a 12.5 domestic gas cylinder, the company earlier requested the CAA for a price increase of Rs.229 due to high freight costs. But the CAA did not permit it.

The CAA price committee held extensive discussions with the Gas Companies several times demanding to pass the benefit of reduced gas price in the world market of months of February and March.

"As a responsible Government, we are always committed to provide relief to consumers."