Shell to be renamed as ‘Litro’ in Sri lanka

The long awaited buy back deal of Shell Gas Lanka Limited was concluded by Sri Lankan Government for US $ 63 million on Wednesday. Consequently, the global energy giant, Royal Dutch Shell PLC will exit from the company and Shell will be renamed as ‘Litro’ in the country.

The new entity ‘Litro’ will be managed by Sri Lanka Insurance Corporation and the import, storage and distribution of LP gas in the country will come under the purview of the Litro Company.

In an announcement to public, government said that the agreement was to buy 51% shares of Shell Gas Lanka and 100% shares of Shell Terminals signed by Secretary to the Treasury Dr. P. B. Jayasundara, Additional Secretary to the President and the Chairman of Sri Lanka Insurance Corporation Gamini Senerath on behalf of the government while Deputy General Manager of the Royal Dutch Shell, Andrew Crowe signed behalf of the Shell Company. Government has agreed to buy.

However according to sources weeks before the sale agreement was to be completed the 29 local distributors of the Shell Gas has been in talks with the energy giant to claim Rs.12 million per distributor as compensation for Royal Dutch Shell PLC’s encouragement of distribution channel in Sri Lanka two years ago on its sole behest to expand the distributor capacity and double the volume of sales on the expense of medium scale distributor business community.

“We request you to compensate the distributors for this investment prior to the transfer of the business” says a letter that has been written by distributors to Sri Lanka’s Shell Country Manager, Walter Sanchez according to an international news website of Royal Dutch Shell PLC, http://royaldutchshellplc.com. (Link: http://royaldutchshellplc.com/2010/01/03/shell-accused-of-abandoning-sol...)

Sources said money is to be recovered from the global energy giant Royal Dutch Shell due to the facts such as losing of a strong brand and hampering of credit lines, and as a part of recovery which each distributor incurred amounting to Rs.40 million as investment for expansions of their existing distributor plants.

“Distributors have been serving to our company since a long time and we will continue to maintain their relationship” said Shell spokesperson Hiran Seneviratne when questioned about the issue adding his unawareness. He further said that it is too early to comment about the new branding strategy under the name ‘Litro’.

After the Colombo Gas Company’s acquisition by Shell for US $ 30 million, since December 1995 Shell virtually ran a monopoly in the country till a Second player Laughs Gas entered the local LP Gas market. At present, Sri Lankan LPG market is dominated by 1.6 million cylinders in circulation by Shell Gas Lanka compared to 550,000 cylinders owned by Laugfs which is seeking to list its shares by an IPO on next month.

- Asian Tribune -