by Gamini Perera
Responding to reports that Munda Gas, the latest entrant to the LPG market, will "refill any cylinder", Shell Gas Country Chairman Roberto M. Moran warned that the company will resort to legal action if Shell cylinders are used for refilling by Munda in selling domestic cylinder. It’s illegal for them to use our cylinders. he said in an interview with ‘Sunday Island’.

Citing an example Moran said such a practice is similar to the filling a bottle of Coca Cola with some other form of soft drink. Operating across the globe, in more than 130 countries and with more than 100,000 employees, Shell companies are guided by values developed over more than a century of successful enterprise. "They are committed to contributing a sustainable development and to delivering energy in an ever cleaner and more socially responsible way," he said.

Shell Gas has linked their domestic LPG cylinder prices to a price ceiling mechanism similar to the model used by the Ceylon Petroleum Corporation (CPC) for patrol and diesel. The pricing mechanism or formula adds up the various components of costs to bring imported LPG from the source to local domestic consumers.

Earlier this year Shell Gas adjusted its price level initially on a monthly basis, similar to CPC’s mechanism. The fist adjustment was implemented last March 18, when Shell Gas reduced their domestic cylinder price in line with the lowering of global LPG prices in February.

The key variables that fluctuate on a regular basis are the international LPG prices and the Rupee-US dollar exchange rate, given that some of the components are paid for in foreign currency. The various components of the formula include the import and storage costs, government taxes and recoveries of Shall Gas and their distributers and dealers, the company said.

According to Roberto Moran, 49% of Shell is still owned by the government of Sri Lanka and is in the process of being offered to private investors. His view is that it is an obligation to clearly justify any price revisions directly, resulting from international LPG price movements.

"A company with a large investment and a long-term interest is sustainable and that we pass on the benefit of price reductions to the Sri Lankan consumer at every possible opportunity," he added.