Sri Lanka LPG supplies wait for dollars to unload amid money printing

ECONOMYNEXT – Sri Lanka’s liquid Petroleum gas distributors awaiting dollars from state and private banks to clear stocks and pay up on letters of credit, distributors said as shortages were experienced by both Litro and Laugfs customers.

State-run Litro Gas said LPG ships are already in port.

Litro said suppliers had asked for a 109 percent increase in the current LC facility in terms of the contract as gas prices have risen since July.

“We are in correspondence with state and private banks to obtain the necessary security to fulfil suppliers request, which is underway.

“We have been releasing cylinders to the Channel, and the temporary shortage experienced in the market is due to the delay in distribution. This will regularize shortly.”

Privately owned Laugfs gas said they were also awaiting dollars.

“We don’t have gas for five days now because we don’t have dollars to open LC’s,” Laugfs Chairman W K Wegapitya told EconomyNext.

“We are speaking to our banks but they don’t have dollars, that’s the problem. But there is gas.”

He was unable to say how long the shortage will last.

Sri Lanka has been experiencing forex shortages due to money printing, mostly from failed bond auctions and money printed to pay the salaries of state workers.

At the moment, interventions to maintain a peg at 203 to the US dollars are also sterilized with printed money at 6.0 percent overnight. Sterilized forex sales can be ended with a float as long as bond auctions work. (Colombo/Nov03/2021)

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