Laugfs makes consumers smile

Wednesday, 3 November 2010 01:52 - - {{hitsCtrl.values.hits}}

By Uditha Jayasinghe

In the midst of Laugfs launching their Initial Public Offering (IPO) gas prices were slashed by Rs.73 from midnight yesterday but Shell prices remained the same despite a buyout by the government.

Laugfs Gas Chairman W.K.H. Wegapitiya quipped that this was the first dividend for future shareholders of the company but took a more serious tone when he explained that the decision was taken due to global prices reducing over the last two months.

“The Consumer Affairs Authority adjusts the gas prices based on a bi-monthly formula that takes into account world market prices. Accordingly prices will reduce by Rs.73 so that a Laugfs Gas cylinder will be Rs.1520,” he explained.

Meanwhile Shell Gas continued its prices unchanged regardless of a re-purchase of Shell Gas Lanka Limited (SGLL) and Shell Terminal Lanka Limited (STLL) at a cost of US$ 63 million by the government. It had decided to buyback 51% of SGLL and 100% STLL and the transaction is to be financed through Bank of Ceylon, People’s Bank, National Savings Bank and Sri Lanka Insurance Corporation.

While the government will maintain a controlling interest it plans to issue the remaining 49% of shares to the private sector, effectively forming a public-private partnership. Even though the government insists that the decision was finalised and the money allocated, Shell Gas in a statement contradicted it saying that the negotiations were still ongoing when the re-purchase was first publicised.