February 06, (LBO) – Ceylon Petroleum Corporation would call open tenders to sell the liquid petroleum gas produced at its refinery, Petroleum Minister A H M Fowzie said. Laugfs Gas, the company which had a 5-year contract to buy the LP Gas from Ceypetco had been given a 3-month extension until April 21.
Laugfs now gets LPG at a Saudi benchmark rate without a premium for freight, on the understanding that it would sell LPG below Shell Gas.
Sri Lanka’s ceramic producers, who are among the largest users of LP Gas have also requested to buy the gas from the Petroleum Corporation.
But LPG has to be removed from the refinery every day because it does not have the capacity to store large volumes of gas.
Meanwhile a senior petroleum official said, tendering may run up against the country’s consumer laws, because LP Gas has been listed as an essential item and tendering can increase its price.
Laugfs may lose the LPG contract if Shell Gas outbids the distributor.
Ceypectco produces about eight percent of Sri Lanka’s annual LPG demand of about 150,000 tonnes.