Gas prices to decline in November

Irangika Range

Gas prices are expected to be slashed in the world market in both August and September and this relief will be provided to consumers in November when the gas price formula is formulated, Trade, Marketing Development, Co-operatives and Consumer Affairs Minister Bandula Gunawardhana said.

Addressing a Media Briefing yesterday in Colombo, the Minister said that local gas prices are evaluated by considering the Saudi Arabia Aramco price index and gas prices for this month have been evaluated considering the prices of June and July months. A high price of US$ 936 (per 1mt) for gas was recorded in the world market in both June and July.

The Minister assured that the maximum reliefs to consumers will be provided upon the reduction of gas prices in the world market for both August and September months and this benefit will flowed to consumers in November.

“The gas price formula is being formulated by the Consumer Affairs Authority with the approval of the Supreme Court by considering world market prices and consumers have to be bear the burden of price hike as it is a global crisis,” The Minister said.

There is nothing to hide in this price formula which formulated following the approve l of Supreme Court and whatever Government is in power should accept it. The CAA never protects multinational companies and the price formula is prepared with the aim of protecting the consumers.

“We never hesitate to provide relief to consumers once the gas prices go down in the world market as consumers have to bear the burden of price hikes once gas prices go up in the international market,” The Minister added.

“We never permitted multinational companies to increase the gas prices as they wanted,” He said. The CAA only permitted to increase a 12.5kg domestic shell gas cylinder by Rs.126, though the company requested a price hike by Rs.244. The Shell company requested for a gas price hike by Rs.175 in January, but we allowed only an increase of Rs.165.

In March, The Shell company asked for a Rs.389 price increase, but the CAA permitted only an increase of Rs.261. Though the Shell Company requested a price hike of Rs.264 in May, We reduced the gas prices by Rs.20 in May. In July, the CAA only permitted a hike of Rs.8, though the company requested for a price increase of Rs.324,” he said.

He said that the world gas prices have been rapidly increased and a gas (1mt) was priced as a US$242 in 2002. The price of gas (1mt) was US$ 291 in the world market in 2003. The price has gone up by 231 percent after year 2003 comparing to the world market prices of 2003.

“We did not want to announce the gas price hike on Friday as it would provide platform to errant traders to conceal stocks and sell old stock by adding of Rs.126,” he said.

Meanwhile Laugfs gas Lanka has increased a 12.5kg cylinder by Rs.189 with effect from midnight today. Accordingly the new price will be Rs.1857.