The Litro Gas Lanka Ltd on Wednesday (29) denied allegations that the government has signed a MoU with Shell Gas Ltd to purchase Gas at US D 105 per MT, contrary to international tender procedures.

This allegation was leveled by former Minister Bandula Gunawardena. He also alleged that the Government has approved the privatization of the Litro Gas Lanka Ltd.

However, the Litro Gas issuing a statement said that “it was the previous government that purchased LP gas without even calling for tenders at higher price for the last two years from a single supplier in a questionable manner.”

Read the full statement below…

Mr Bandula Gunawardene who was silent on the corrupt practices of ex-President now sheds crocodile tears ostensibly for LP gas consumers.
The Chairman M/s Litro Gas Lanka Ltd today put the records straight with regard to the procurement of Liquefied Petroleum Gas (LP Gas) by the sole distributor M/s Litro Gas Lanka Ltd. Finance Minister Ravi Karunanayake had earlier refuted the claims by the former minister Bandula Gunawardena that the Government has approved the privatization of the Litro Gas Lanka Ltd.

The Minister Ravi Karunanayake has categorically said that the Litro Gas Lanka Ltd a house hold name in the country will never be privatized and the government would take every efforts to pass the benefit of the market fluctuations to the consumers as previously done twice within the six months of the new government came in to office.

Mr Bandula Gunawardena had leveled allegations that the government has also signed a MoU with Shell Gas Ltd to purchase Gas at US D 105 per MT, contrary to international tender procedures.

Mr Shalila Moonesinghe Executive Chairman of the Litro Gas Lanka Ltd said that it was the previous government that purchased LP gas without even calling for tenders at higher price for the last two years from a single supplier in a questionable manner. The previous management of the Litro Gas Co headed by Mr Gamini Senarath, who was also the then Chief of Staff of the former President Mahinda Rajapaksa had entered into a direct contract agreement with a Dubai based company to supply LP gas to Sri Lanka for a period of two years up to May 2015, with an additional price increase of USD Nine per MT in the first year and USD Five in the second year.

Sri Lanka purchases an estimated 190,000 MT + 10 % of LP gas annually and this abnormal increase by US Nine dollar in 2013/2014 to USD 135 and to USD 140 in the second year. This questionable action by the previous government incurred a loss of Rs 576 Million ( USD 4.37 million) to the Litro company.. The current prices being negotiated are in the range of USD 105/MT and accordingly there will be a savings of Rs 1,716 million (USD 13 Million) within the next two years under the new government new government has been able to

It is pity that Minister Bandula Gunawardena who was a powerful minister in the Cabinet of the then President Mahinda Rajapaksa could not utter a word against this authoritarian and contradictory action of the all powerful chairman Gamini Senarath. If not for this high handed arbitrary action which incurred a revenue loss of Rs 576 million, the benefit could easily be passed on to the consumers by reducing the selling price of LP gas in the market.

On the contrary, the present Chairman of the Litro gas Mr Shalila Moonesinghe said that the management appointed by Minister of Finance Ravi karunanayake called for international tenders for the procurement of Gas for the next two years under a competitive market price. 12 would be suppliers, shortlisted were evaluated and since the lowest evaluated bidder did not furnish the required document within the stipulated time period, the tender committee has started the process of negotiation with the other short listed suppliers as per the procurement guidelines.

Apart from the technical and financial feasibility, the tender committee, as per the procurement guidelines, will also consider the reliability, dependability, consistency and the availability of tankers at the disposal of the suppliers in addition to their past experiences in dealing with such a vast quantity of 190,000 MT per year.

The chairman Litro gas Lanka Ltd assured that under the existing procurement process, which is under negotiation, it will be possible to negotiate the best market price which is around USD 34.25 less per MT than the previous negotiated price of USD 140 and the cumulative savings from the Gas supplies to Litro Gas Co in the next two years is expected to exceed Rs 1,716 million (USD 13 million).

Due to best market practices adopted by the yahapalana government under the guidance of Minister Ravi karunanayake in profit maximizing, it will help further pass the benefit to the consumers in future in addition to price reduction of gas already made twice within the six month of the government.