- Says higher demand propelled by lower prices key reason for shortage
- Also cites supply side constraints due to global incidents and bad weather
- Says average LPG demand has increased to 1,300MT from 900 – 950MT
State-owned Litro Gas yesterday identified increased local demand due to price reductions and global supply constraints as two key reasons for the current LP gas shortage experienced
A brief statement by Litro Gas said the substantial LP gas price reduction following the finalization of price formula in September created excessive demand and also saw the entry of new segment customers tempted by the low LP gas prices.
According to Litro, the current price of Rs.1, 493.00 per 12.5kg cylinder is the lowest since 2016 when the price of 12.56kg cylinder was reduced to Rs.1, 321. 00.
Litro also said it had to serve some of the customers of its competitor due to the supply shortages experienced by them.
“The current status quo continues to impact LPG industry in the country at different levels of intensity, driven by different causes.
As a result of the shortage experienced by Litro’s competitor, a significant number of consumers switched to Litro, further increasing the demand for Litro LPG,” the statement said.
“Lastly, the prevailing bad weather conditions continue to pose challenges to vessels trying to reach the two bunkering facilities of Litro Gas further aggravating the situation.
Off-shore unloading too slowed down severely to the extent that there are vessels waiting in-line to be unloaded off-shore,”
Shedding light on global supply constraints, Litro Gas said the drone attack on Saudi Aramco’s oil processing facilities at Abqaiq and Khurais in eastern Saudi Arabia triggered a delay in shipments to several markets globally including Sri Lanka.
“The apparent shortage resulted in a ‘panic-buying mode’ within a cross section of consumers, increasing the average demand to 1,300MT from 900 – 950MT, putting further pressure on the entire logistics process,” the statement noted.
Litro Gas said it is working to resolve the current situation to continue to supply the required amount of LP gas cylinders to the market undeterred by challenges.