Gas Concern

July 26, 2010 (LBO) – A large industrial user of liquefied petroleum gas as expressed concern over a proposed state take-over of a private gas distributor in Sri Lanka as energy sector management under state has created serious problems in the past. Lanka Tiles, a manufacturer and exporter of ceramic tiles says, it is braced for price increases in energy with a state-run distributor, Ceylon Petroleum Corporation, currently running losses.

“However it needs to be mentioned that the proposed acquisition of the majority of shares of Shell Gas Lanka Ltd by the Government of Sri Lanka does not augur well for the industries using LPG,” Lanka Tiles chief executive Mahendra Jayasekera told shareholders in the firm’s annual report.

“Past experience suggests that the Government lacks the necessary professional wherewithal to successfully run an energy company catering to a substantial sector of the national economy.”

Gas is used in the ceramic industry to fire kilns.

Sri Lanka’s LP gas use expanded after a state monopoly was sold to Shell, a Dutch petroleum firm. The firm built a large storage terminal and halted chronic shortages of gas that dogged the sector earlier.

Before the entry of Shell state price controls gave no incentiv