LAUGFS, Litro to jointly use Hambantota storage terminal
The government is now considering the feasibility of maintaining a stable price for Liquefied Petroleum Gas (LPG) by allowing a public and private partnership (PPP) to maintain LAUFGS terminal jointly between LAUGFS Gas and state-owned Litro Gas for storage with the aim of reducing costs.
LAUGFS Holdings Ltd Chairman W.K.H Wegapitiya told the Business Times that this proposal was made by him along with two other suggestions at a meeting held with the President along with several top officials.
He noted that he has also proposed to allow a price increase or government subsidy for the two companies to supply LPG cylinders at the present price of Rs.1,493. He said there was no plan to merge the two companies, according to some reports.
Therefore the President has appointed committee to study the proposal of jointly operating the LAUFGS terminal to maintain stocks of LPG for the use of two companies he explained.
The cost of transport cost of two companies’ could be reduced by around US$ 70 per metric ton by using LAUGFS Hambantota facility with a capacity of 30,000 and its other 3000 MT terminal at Mabima.
Litro Gas has a terminal with a small capacity of 8000 MT and it has to bring LPG shipments several times per year to meet the consumer demand.
It has been revealed at the meeting that the state owned company is supplying 32.000 MT monthly to the local market while LAUGFs provides 11,000 MT to meet the total demand of 43,000 MT.
The other advantage was the possibility of purchasing LPG at a low price for both companies via a joint procurement committee by LAUGFS Terminals Ltd which is operating its state-of-the-art LPG transshipment terminal at the Hambantota International Port.
Therefore it has been agreed in principle to further study the feasibility of this proposal by referring it to a special committee, a senior official said.