Shell claims Rs 1.7 b from Govt

Nadira Gunatilleke

*Shell gas company requests price revision every two months

*Govt intervenes to decide gas price to protect consumers

Shell Gas Company has made an application to the Arbitral Tribunal under the Price Revising Formula Agreement claiming over Rs1.7 billion from the Government for the loss they have experienced by selling LP gas for the price decided according to the formula.

The Consumer Affairs Authority has been informed to contact the Attorney General to obtain instructions in connection with this issue, Trade, Marketing Development, Cooperatives and Consumer Affairs Minister Bandula Gunawardena said. Minister Gunawardena said Shell Gas Company requests revision of the price of gas once every two months but they had never been given the demanded price due to the differences in calculation.

The gas price is revised six times per year and the price of gas has been decided by the Price Committee of the Consumer Affairs Authority using a price formula based on the information provided by the company.

In 2009, the price of gas went down three times and increased two times.

On one occasion the gas price did not change.

According to the Minister, there was a protest in the country in connection with the Government’s intervention in deciding LP gas prices once in every two months.

Certain media created a misunderstanding among the public on this system and, as a result the public tended to think that it is the Government which increases the price of gas. Minister Gunawardena pointed out that certain media wanted the Government to let gas companies decide the price of gas.

The Government intervenes to decide the price of gas to protect the consumers, he added.

Shell Gas Company has also sought relief from the Arbitration Tribunal to meet cost of arbitration, including all incurred legal expenses.

It has pleaded for an order of specific performance requiring the Government to abide by and conform to the terms and conditions of the clause 2.1 (11) and 2.5 of the agreement between it and the Government are among the other demands.