"However it needs to be mentioned that the proposed acquisition of the majority of shares of Shell Gas Lanka Ltd by the Government of Sri Lanka does not augur well for the industries using LPG," Lanka Tiles chief executive Mahendra Jayasekera told shareholders in the firm's annual report.
"Past experience suggests that the Government lacks the necessary professional wherewithal to successfully run an energy company catering to a substantial sector of the national economy."
Gas is used in the ceramic industry to fire kilns.
Sri Lanka's LP gas use expanded after a state monopoly was sold to Shell, a Dutch petroleum firm. The firm built a large storage terminal and halted chronic shortages of gas that dogged the sector earlier.
Before the entry of Shell state price controls gave no incentives for the then Colombo Gas to increase its customers and chronic cylinder shortages and high priced bottles prevented more people from using cooking gas. The problems were fixed after the Shell purchase.
Shell said it was exiting Asian gas businesses and has already sold out of Pakistan. Sri Lanka's government has said it would buy the distributor in which it already owns 49 percent.
The Sunday Times newspaper said a team from Shell will come to Sri Lanka to have talks with the government on the sale.
The state continued to interfere in pricing in gas with no regulator to impose cost-based pricing. A court mandated price formula was then applied which set two prices for two distributors.
Sri Lanka's economy has been badly battered by government interference in energy prices. Petroleum - particularly petrol - is heavily taxed and is a large revenue earner for the state.
When prices are not adjusted according to a formula state cash flows are hit. In the past the gaps have been filled with printed money from the Central Bank, driving inflation sky high and putting pressure on a rupee-dollar exchange rate peg.
Loss-making state utilities borrow tens of billions of rupees from the banking system, put pressure on interest rates and make monetary policy difficult for the Central Bank.
The central bank has advocated the establishment of a realistic price formula for refined petroleum products.
Sri Lanka also struck risky oil derivatives to support government policy on petroleum price fixing and lost more than 500 million US dollars. The deals are currently in court.
Sri Lanka's state power utility, the Ceylon Electricity Board, is the top loser among dozens of loss making state firms. This year it is on track to lose 40 billion rupees, according to officials.
The power ministry says it lost 148 billion rupees in the last 10 years and will lose 391 billion rupees in the next 10 years, unless something is done to fix it.
So the management takes the easy way.
Strangely, ministers of finance who are custodians of the public purse and have to bear the burden are silent and do not bring up these issues for discussion.
So, customers continue to suffer and has only one outlet to voice their grievances: talk loud at public fora. But that too is not being listened to by the powers that would be.
Without a change in the culture and the mindset, sustainable long term economic growth is a mere dream.
For example some time back when Sri Lanka insurance was under private management, the branches were open longer, and some branches were open 24 hours. But now under the management of the government again no branch is open 24 hours, and they even close earlier than before. This is the difference in the level of service we can expect.
In the recent past it has been proved that they have done what they have promised to great extent, especially if energy minister is considered. So lets cross our fingers and wait, I am sure we will win in this case also just like we won the war which once we belived that we cannot
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