CAA takes legal action against LAUGFS Gas over supply disruptions

Glocal
By Editor_1
-laugfs.lk

COLOMBO – The Consumer Affairs Authority (CAA) has initiated legal proceedings against LAUGFS Gas PLC over its failure to maintain an uninterrupted supply of cooking gas, causing hardship to consumers across the country.

The case was filed before the Colombo Ch

ief Magistrate’s Court under the Consumer Affairs Authority Act No. 9 of 2003, is scheduled to be taken up for hearing on November 11.

According to a report released by the CAA on Friday (30), the supply disruptions stemmed from several technical and financial difficulties faced by LAUGFS, including problems in procuring liquefied petroleum gas (LPG) in the composition required under Sri Lankan Standards.

The standards stipulate that LPG distributed in the local market should comprise 70% butane and 30% propane. However, difficulties in sourcing the required mixture, in a 70:30 butane-to-propane ratio, left LAUGFS without an independent supplier.

The company had attempted to procure smaller quantities from the supplier serving state-owned Litro Gas Lanka Ltd., but the supplier declined to supply LAUGFS, the CAA said.

Although LAUGFS operates a terminal in Hambantota with the capacity to blend butane and propane, its existing agreements permit it to cater to only 20% of the domestic market, with Litro supplying the remaining 80%. The resulting shortfall in LAUGFS’s distribution capacity has also placed additional pressure on demand for Litro gas.

The CAA said LAUGFS had previously sought increases in its 20% market-share allocation whenever supply disruptions occurred. In view of adverse weather conditions prevailing since December last year and the impact of Cyclone Ditwah, Minister of Trade, Commerce, Food Security and Cooperative Development Wasantha Samarasinghe had temporarily permitted an increase.

However, following another failure to maintain supplies in April, the Minister rejected a further request by LAUGFS to increase its allocation. Instead, the government moved to expand distribution through Litro Gas Lanka and release more new blue cylinders into the market.

In response to the continuing distribution problems, the CAA directed LAUGFS to refund the initial deposits paid by its customers, enabling them to return their unused LAUGFS cylinders and switch to Litro gas, which is more readily available in the market.

However, LAUGFS reportedly informed the Authority that, taking into account the age and depreciation of the cylinders, it could refund only around Rs. 1,000.

The CAA noted that this would place consumers at a considerable disadvantage, as purchasing a new Litro cylinder would cost more than Rs. 10,000, leaving customers to bear a substantial additional financial burden.

–ENCL

Editor_1
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