LAUGFS Gas back in biz but will continue fight for ‘fair price hike’

• Asserts CAA’s upward revision of LPG prices in contravention of SC approved pricing formula, hence unacceptable
• Chairman Wegapitiya says company accepts increase under protest
• Renews appeal to CAA on its legal obligations in approving revisions
• Company’s energy biz in 1QFY22 saw pre-tax loss soaring by nearly 5 times to Rs. 779.5 m

LAUGFS Gas Chairman W.H.K. Wegapitiya

LAUGFS Gas PLC yesterday said it was back in the retail market after a month of absence and reiterated it would continue to lobby for a fair price hike.

The return of LAUGFS Gas is following the Consumer Affairs Authority (CAA) on 12 August approving an upward revision of LPG prices of the 12.5 kg cylinder to Rs. 1,856 and 5 kg cylinder to Rs. 743 to be applicable in the Colombo District.

LAUGFS Gas Chairman W.H.K. Wegapitiya said the company had been making regular applications to the CAA to obtain its approval for increasing the prices of domestic LP gas cylinders. 

“These applications have been made in accordance with our agreement dated 28 December 2007 with the CAA. Under the said agreement, the CAA is legally obliged to grant price increases on the basis of the pricing formula approved by the Supreme Court in SCFR 163/2007. The company had brought this to the attention of the CAA on several occasions with the last being by letter dated 7 August 2021,” he stated.

Wegapitiya said the recently granted price revisions by the CAA were contrary to the Supreme Court approved pricing formula and therefore were “not acceptable”.

“Nevertheless, as a respected publicly quoted company, we will accept this increase under protest and while reserving our right,” Wegapitiya said in a filing to the Colombo Stock Exchange.

He said that LAUGFS Gas had once again apprised the CAA of its legal obligations and requested it to approve price revisions in line with the Supreme Court approved pricing formula.

“We are committed to protecting the rights of our stakeholders, including our esteemed shareholders, and will continue to serve the people of Sri Lanka to the best of our ability,” Wegapitiya added.

LAUGFS' energy business in the first quarter saw its pre-tax loss jump by nearly five times to Rs. 779.5 million from a year earlier figure of Rs. 171.5 million. Post-tax loss rose from Rs. 145 million to Rs. 648.5 million. 

In FY20 first quarter the energy business reported an operating profit of Rs. 281.7 million whilst a year later it turned a loss of Rs. 422 million. Revenue improved marginally from Rs. 5 billion to Rs. 5.4 billion. LAUGFS trading business too reported a Rs. 272 million after tax loss up from a loss of Rs. 209 million. 

The transport and logistics segment saw a loss of Rs. 22 million as against a profit of Rs. 160.5 million in 1Q of FY20. Group pre-tax loss rose to Rs. 901.7 million from a loss of Rs. 180 million. 1Q revenue however rose to Rs. 9.6 billion from Rs. 5.7 billion.