Shell Gassed

Shell Gas Lanka Ltd Tuesday announced it will reduce supplies because the government did not allow them to increase retail prices to offset escalating production costs amid losses that amounted to over Rs. 790 million. Shell Gas Lanka Ltd Tuesday announced it will reduce supplies because the government did not allow them to increase retail prices to offset escalating production costs amid losses that amounted to over Rs. 790 million. “We reluctantly and regretfully have decided to curtail supply of domestic gas cylinders to mitigate mounting losses,” Shell said in a statement.

A unit of Royal/Dutch Shell Group, Shell Gas is Sri Lanka’s largest liquid petroleum (LP) gas supplier.

Shell says it is losing money, as current retail prices are fixed at Rs. 850 per 12.5 kilo cylinder in line with a price control mechanism decided by the government, but it must be sold at Rs. 1,050, for them to break-even.

Surging crude oil prices have pushed world LP gas prices to US$ 582 per metric tonne in January, which is five-percent over the corresponding period in 2005.

Prices of imported gas are forecasted to exceed US$ 600 per metric tonne in February, Shell said.

Local gas prices are regulated by th