Arbitrage

June 10, 2008 (LBO) – Laugfs Auto Gas, a Sri Lankan gas distributor that started conversion of vehicles to run on auto gas, said that it was timely for owners to covert to gas because it is now almost 50 percent cheaper than petrol. “Liquid petroleum gas has always been cheaper than petrol and we believe it will remain so,” Laugfs chairman W K H Wegapitiya said Tuesday.

“With fuel prices rising sharply in recent months and oil price set to climb even higher, it would be advantageous for owners to convert their vehicles.”

The company already has 30 filling stations around the island, mainly in Colombo and neighbouring districts where the population is concentrated, he told a news conference.

“We plan to add more filling stations. You can travel about 400 kilometres on a full tank of gas.”

The difference between the price of auto gas and petrol is widening with 90 octane petrol now 157 rupees a litre while auto gas is 80 rupees a litre.

Within a year Sri Lanka has seen petrol prices increase by 48 percent from 106 rupees a litre to 157 rupees while gas prices have increased only 29 percent from 62 rupees to 80 rupees.

In Sri Lanka petrol users are heavily taxed, and petroleum distributors also fleece th