February, 08 (LBO) – A decision by the Ceylon Petroleum Corporation to tender its liquid petroleum gas output in the open market will re-create an absolute monopoly, Sri Lanka’s second gas retailer has said. CPC which produces about 10 percent of the country’s annual L P gas requirements now sells its production to Laugfs Lanka, for retail distribution.
“If the L P Gas is tendered the monopoly of Shell gas will be re-established,” Chairman of Laugfs Holdings, W Wegapitiya said.
A five year contract to CPC’s gas production ended late last year, and the state petroleum has extended the contract by three months twice since then. Second renewal is ending in April 21.
Until the entry of Laugfs more than five years ago, Shell Gas had an absolute monopoly in the domestic gas retail business.
CPC sells gas at a benchmark Middle Eastern rate to Laugfs, which is below the cost of freight-paid gas imported into the country, on the understanding that the benefit is passed on to the consumer.
Wegapitiya says their domestic gas cylinder is priced 21 rupees below the competition.
He says Shell is likely to outbid his company if CPC’s LP gas is put on tender, and Laugfs would not have t