Lanka likely to get LPG from Iran at concessionary prices

Sri Lankan households might get a chance to breathe a sigh of relief, if the Iranian Government agrees to sell Liquefied Petroleum Gas to Sri Lanka at a concessionary price.

The matter is under intense consideration by the Iranian Government and the forthcoming visit of Iranian President Dr. Mahmoud Ahmadinejad, would give Sri Lanka the opportunity to broach the subject which was expected to be favourably considered in the light of the growing friendly ties between the two countries, officials said.

President Mahinda Rajapaksa's meetings with Iranian Supreme Leader Ayatollah Khamaini and President Dr. Ahmadinejad had facilitated substantial economic cooperation between the two countries, with Iran pledging aid for two major projects in Sri Lanka in addition to availing to Sri Lanka, interest free credit for crude oil purchases, all valued at US$ 2,042 million, they said.

Sri Lanka's Ambassador to Iran Mr. M.M. Zuhair said they presented a strong case to the Iranian authorities to consider a discounted price for long term purchase of LPG.

Against the background of rising prices of LPG filled cylinders widely used in all urban Sri Lankan households, the Sri Lanka Mission in Tehran in consultation with the Ceylon Petroleum Corporation had been exploring LPG purchase from Iran, which too has a huge domestic market.

The Mission has informed authorities in Colombo that this matter could best be taken up at the highest level during the forthcoming visit, , and that Iran is very likely to consider it favourably, a spokesman here said.

The Cabinet, in March approved a proposal by Petroleum and Petroleum Resources Development Minister A.H.M. Fowzei permitting the Ceylon Petroleum Corporation to enter LPG retail business in order to enable consumers to purchase the limited quantity of LPG produced at the Sapugaskanda refinery at a reduced price.

The Sapugaskanda Refinery produces 1,500 MT of LPG per month, which is sufficient to meet only 10% of the current demand in Sri Lanka. A positive Iranian response would be a huge boon for the CPC to enter the LPG market and enable the CPC to make available LPG to the harassed households in Sri Lanka at more reasonable prices.

Meanwhile, there were media reports here that Russian President Vladimir Putin in the course of his talks with Libyan leader Muammer Ghaddafi in Tripoli, Libya on April 16th has proposed the setting up of an OPEC style body of gas producing countries, aimed at monopolizing gas prices a matter which appears to be in the offing. However, a long term gas contract if prioritized would help Sri Lanka to avoid any such developing situation, a spokesman for the gas industry here said.

Iran has the second largest gas reserves in the world and has good access to East Asia both by land and sea.