Sri Lanka’s primary gas supplier, Litro Gas Lanka says it remains at risk of closure due to incurring a staggering loss of Rs. 2,000 per gas cylinder.
Litro Gas has issued the warning, despite having recommenced liquefied petroleum (LP) gas distribution from yesterday (18).
Addressing a media briefing, Litro Gas officials explained the possible short-term consequences of this situation.
Pointing out that the sudden devaluation of the Rupee has further complicated its purchases at current market rates, they said if this continues, the company has only three months left to survive without a price hike.
Litro Gas Lanka further said it is facing losses every month and that it has been getting increasingly harder to secure Sri Lankan rupees to purchase US dollars to clear shipments.
The Advertising Manager of Litro Gas, Piyal Colombahettige said the global price of a metric tonne of LP was USD 800 in February and if the gas purchased at the February rate is unloaded the company incurs a loss of Rs. 200 million.
“If we calculate the March rate, which is USD 1,018, we will incur a loss of over Rs. 200 million. Taking the March rate into account, we incur a net loss of Rs. 2,000 from each cylinder. If we purchase another shipment at the March contract rate, this will signal the end of Litro Gas,” he said.
Piyal Colombahettige further explained that this means that Litro Gas cannot afford these prices based on the current dollar rate anymore, adding that Litro Gas will have to close down due to this factor. (NewsWire)