Laugfs Holdings Ltd. predicts consumers will be able to enjoy reduced domestic cylinder prices from March or April this year.

The company announced a price hike of Rs.212 last week bringing the price of Laugfs’ 12.5 kg domestic LPG cylinder to Rs.1460. This price revision was possible after a lengthy legal tussle with the Consumer Affairs Authority (CAA) ended with both parties recognizing a pricing formula which will enable the company to adjust its domestic prices according to world crude oil prices.

"We predict world crude oil prices will decline around March or April and this benefit will be passed down to our consumers by way of reduced domestic LPG cylinder prices," said W. K. H. Wegapitiya, Chairman, Laugfs Holdings Limited at a media briefing recently.

The company said it purchases LPG from two sources. 65 percent is purchased from the world market. The balance 35 percent is purchased from the refinery owned by Ceylon Petroleum Corporation—which is also priced at world LPG prices. The company said it had no choice but increase its prices in order to survive.

According to the pricing mechanism agreed upon by Laugfs and the CAA, the pricing is pegged to the Saudi Aramco Contract Price (SACP) – the benchmark for international LPG prices – which will allow the company to set its prices every two months according to SACP movements.

To the SACP is added ocean freight charges, insurance, CIF, terminal fees, the Port Authority levy and VAT. The company adds a 30 percent margin to cover overheads and profits.

The SACP, which is set every month and is correlated to crude oil price movements, stood at US $ 548.5 per metric tonne in January 2007 and ended the year at US $ 877.5. It came down marginally by the new year and is currently set at US $ 873.5 per metric tonne for this month.

Whenever world oil prices increase, prices of petroleum-based products in our country automatically follow suit. But never have domestic prices come down to reflect the downturn in world oil prices. If crude oil prices do come down, as predicted by Laugfs Holdings, for the first time consumers will enjoy the benefit of reduced prices as guaranteed by the CAA and Laugfs Holdings.

Who will have the last laugh? Only time will tell.Kehelwela Estate registers record price

At this week’s Tea Auction, which was the first one for the New Year, an All Time Colombo Tea Auction record price of Rs. 365/-, was established by Kehelwela Estate for an invoice of the Dust 1 grade.

Several large buyers including multi nationals were actively biding for this tea, which was eventually sold to Ceylon Tea Marketing Ltd. The estate, which is one of the finest Low Grown plantations, is owned by the renowned Orthopaedic Surgeon Dr. Rienzie Peiris, who gets personally involved with offering advice on manufacture. The sale of all Kehelwela teas is handled exclusively by Lanka Commodity Brokers Ltd.CCI invites vendors to join the Trade Mission to Qatar