LAUGFS Gas has published a line-by-line defence of the Rs 1,775 it added to the 12.5 kg domestic cylinder on Friday, attributing the rise to the Saudi Aramco contract price, war-driven freight and insurance premiums, the exchange rate, VAT and its own financing costs.
Nalinda Kurukulasooriya — described by the Daily Mirror as Chief Executive Officer of LAUGFS Gas PLC and LAUGFS Engineering, and by Hiru News as a company director — set out the breakdown to reporters on Saturday. The increase took effect at midnight on Friday, lifting the 12.5 kg cylinder from Rs 4,965 to Rs 6,740.
The five components
| Component | Added per 12.5 kg cylinder |
|---|---|
| Saudi Aramco contract price (CP) increase | Rs 706 |
| Premium — shipping and insurance | Rs 417 |
| Exchange rate movement | Rs 299 |
| Subtotal before tax | Rs 1,422 |
| VAT at 18% | Rs 256 |
| Company financing costs (bank borrowings, LCs) | Rs 90 |
| Total | Rs 1,768 |
The VAT line checks out exactly: 18% of Rs 1,422 is Rs 256. The five components therefore sum to Rs 1,768, Rs 7 less than the Rs 1,775 actually added.
Kurukulasooriya said the Aramco contract price, issued at the start of each month for a metric tonne of gas, is the base on which the cylinder price is built, and that it had risen sharply since the start of the year. He attributed the higher freight and insurance premium to the war situation.
The two filings differ on what the breakdown proves
The Daily Mirror carries only three of the five lines — the Rs 299 exchange-rate component, Rs 256 of VAT and Rs 90 in financing costs — while still reporting the Rs 1,768 total. The Rs 706 contract-price line and the Rs 417 premium, the two largest items, appear only in Hiru’s Sinhala filing. Read on the Daily Mirror’s version alone, the itemised costs of Rs 1,768 sit just below the Rs 1,775 charged, implying the company roughly broke even on the revision.
Hiru’s filing quotes Kurukulasooriya going further: “Properly, the price of a 12.5 kg gas cylinder should have gone up by Rs 1,912. We increased it by Rs 1,775. This was not done to seek profit or to inconvenience the consumer.”
That figure does not follow from the company’s own list. The itemised components total Rs 1,768; the Rs 1,912 the company says was justified is Rs 144 higher, and neither filing accounts for the difference. This desk is reproducing both figures as stated rather than selecting between them.
Context the company did not raise
Neither filing mentions that the increase was announced about eleven hours after LAUGFS Gas PLC reported a net loss of Rs 1.54 billion for the September quarter, 88% wider than a year earlier. The Daily Mirror adds one cost factor Hiru does not: the closure of the company’s Hambantota operation, which it says also affected the cost structure.
State-controlled market leader Litro Gas has held its 12.5 kg cylinder at Rs 4,365 since September, leaving the LAUGFS cylinder roughly Rs 2,375 dearer. Neither filing says whether Litro intends to follow.
The breakdown contradicts the minister
The company’s account is directly opposed to the government’s. Minister Sunil Handunnetti told Parliament on Saturday that the increase was not a national gas crisis but a consequence of LAUGFS’s own financial and tax position.
The breakdown published hours later attributes Rs 1,422 of the Rs 1,768 — about 80% — to external factors the company does not control: the Aramco contract price, war-driven freight and insurance, and the exchange rate. Only the Rs 90 financing line is internal to the company, and the Rs 256 of VAT is a tax the state levies rather than one the company absorbs. Neither account has been tested against the other, and no filing puts the minister’s claim to the company or the company’s figures to the minister.
Update, Sunday: the regulator will test the breakdown
The Consumer Affairs Authority has summoned LAUGFS executives to appear on Monday, 16 November, saying it will examine the increase made on the strength of these cost claims and whether those claims are internally consistent.
That answers the question this article left open on Saturday. The Authority’s stated test — consistency — goes to the gap identified above between the Rs 1,768 of itemised lines and the Rs 1,912 the director called fully justified, and to the Rs 1,775 actually charged.
Not reported
Neither filing gives the Aramco contract price itself in dollars per tonne, the rupee rate used, the size of the Hambantota cost effect, or the basis on which the Rs 1,912 figure was reached. Neither says whether the Rs 706 contract-price component reflects one month’s movement or the cumulative rise since January. The Consumer Affairs Authority’s response, listed here as missing when this article was first published, arrived on Sunday and is recorded in the update above; what the Authority concludes is not yet known.