Losing Gas

Amidst rising global gas prices, a lack of industry standards and a declining local market, auto gas companies question the logic of pumping gas in a stagnant industry. Amidst rising global gas prices, a lack of industry standards and a declining local market, auto gas companies question the logic of pumping gas in a stagnant industry.

Two players dominate the 7000 tonne market for Auto LPG. Shell Gas Lanka and pioneers in the business – Laugfs Gas who do 70 percent of the conversions.

With eight dealer owned filling stations in and around Colombo, Shell has held auto gas prices steady at Rs. 33 since October 2002.

Last month in response to global prices, it raised it to Rs. 36 a MT, while Laugfs has said it will still keep prices steady in a bid to protect its turf.

But price and distribution are at the heart of the industry’s problems.

“The market has been down the past few years and vehicle conversions have dropped from 30 to 40 cars a month some years ago to about five or six a month,” Director Sales at Shell Gas, Radesh Daluwatte said.

One time conversion costs range from Rs. 25,000 to Rs. 50,000 based on the type of car. But that’