Gas Play

March 09, 2008 (LBO) – Sri Lanka's state-owned petroleum utility will enter the liquid petroleum gas (LPG) market by June using fuel dealerships, a top official said, while plans are underway to boost gas production. Ceylon Petroleum Corporation (CPC) now produces about 60 metric tonnes of LPG a day or about 10 percent of the island's requirement, which it sells to private player Laugfs Gas.

Petroleum minister A H M Fowzie told the cabinet of ministers last week that CPC is starting a gas recovery unit to increase output at its refinery in Sapugaskanda, north of Colombo.

The recovery unit will see production rising from 18,000 metric tonnes to 36,000 tonnes a year or about 20 percent of the country's requirement.

The total LPG requirement of the country is about 160,000 tonnes a year of which 75 percent is for domestic use and the balance for industrial use.

"We're now in the process of trying to distribute LPG on our own," CPC chairman Ashantha de Mel told LBO in an interview.

The CPC would distribute gas through its own dealer network of around 700 outlets.

The CPC now supplies Laugfs Gas at around 200 dollars per tonne less than other suppliers but the cost benefit has not been passe