One of the primary reasons for the Government to bid for Shell Gas Lanka Limited is owing to “LPG” which is commonly known as “Domestic Gas” is becoming an “essential item” in Sri Lanka.
An official involved in the buying process said, “gas has become a highly essential item” for the general public”.
Even now, the existing 2 gas operators Shell and Laugfs Gas have to seek Government permission before increasing their retail prices.
The official said, if the price of a domestic gas cylinder goes up, it becomes the talk among the public the next day.
Most of the urban and semi urban households in Sri Lanka are now using Gas cookers instead of using traditional firewood to cook.
This situation, a market trend expert says, will soon spread to the rural areas as well.
If that happens he says, “gas prices” will become a highly “sensitive” topic in the society which will put pressure on Governments.
The government official said, “Already it is happening”
According to him, it is this reason why the Government wants to buy the Shell gas company, the biggest gas player in the market.
Having Shell gas under the state control will help the government to influence Gas prices in the market.
Minister Keheliya Rambukwella recently said, once the government buy the Shell Gas Lanka Limited, it will open the market for new players, thus creating competition.
As of now the Government holds 49% of the Shell Gas Lanka Limited and started negotiations on Friday to buy the rest of 51% of the company.
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