Laugfs gas price hike driven by company’s financial and tax issues, says Minister

Rejecting allegations levelled against the government by the opposition regarding the increase in Laugfs gas prices, the price hike is due to existing financial and tax issues within the company, Minister of Industry and Entrepreneurship Development Sunil Handunneththi stated.

Speaking in Parliament today (14), the Minister noted that nearly 90 per cent of the country's gas market is supplied by the state-owned Litro Gas company.

He pointed out that while Litro Gas fills and releases around two million gas cylinders to the market monthly, Laugfs releases only about 300,000 gas cylinders per month.

Accordingly, the Minister emphasised that the price increase applies only to the Laugfs gas cylinders belonging to the private sector.

He also mentioned that according to the facilities granted to Laugfs, 60 per cent of its gas supply must be exported, while permission exists to release the remaining 40 per cent to the domestic market.

However, the Minister alleged that the company failed to properly implement those conditions since 2019.

He pointed out that Laugfs requests to sell gas in the domestic market while simultaneously obtaining facilities, including tax concessions, under the Board of Investment.

Furthermore, the Minister alleged that the relevant taxes were not paid since 2019, and stated that the company currently faces a loss of around Rs. 10 billion.

The Minister noted that the current unavailability of special facilities previously granted to Laugfs also contributed to this situation.

He also accused them of attempting to pass the burden of this issue onto the public.

The Minister stated that numerous concessions were provided through the 2027 Budget to reduce the public's cost of living, and the gas price hike was turned into a political topic to divert attention away from those concessions.

However, he noted that he acknowledges an issue arose for consumers due to the Laugfs gas price increase.

The Minister emphasised that the government is prepared to take responsibility for providing solutions to that problem.

He pointed out that a mechanism must be established allowing consumers to purchase whichever gas brand they prefer, regardless of the cylinder's colour.

To achieve this, the storage capacity of the state-owned Litro Gas company needs to be increased, and work is underway towards that end, the Minister stated.

Minister Sunil Handunneththi further stated that this is not a gas crisis affecting the entire country, but rather an issue faced by consumers who use Laugfs gas.