By Jithendra Antonio
In the wake of the governments’ sky high promises to offer LPG at lower prices to consumers after the buyback, The Bottom Line reliably learns that Royal Dutch Shell PLC has faced serious criticism from its distribution channel in Sri Lanka and talks are on to compensate its distributors by the world’s second largest oil and gas giant before its exit from the country.
“Shell asked us to expand our operations in the country last year or to ‘step down’ from business if we did not have the capacity to expand from our own investments. So we had to generate funds through various ways. They were using our money to build their brand at no cost without revealing us their exit strategy. There abrupt exit will cost us serious losses,” said an official from Shell Gas Lanka’s distributors.
According to the distributors, Royal Dutch Shell PLC has encouraged its 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 of Shell Gas Lanka Limited.
The official also said that each of the distributors had to invest nearly Rs.40 million to upgrade and expand their operations as requested by Shell Gas Lanka.
According to him, the sale of Shell Gas Lanka would result in for them to lose the backing of a strong brand and hindering of credit lines.
He said that they are not asking for the whole Rs40 million afforded by each of them but at least some reasonable compensation. However since the negotiations are happening at the moment he refused to give us further comments on the matter.
There are around 30 Shell gas distributors islandwide.
However, neither the present country manager of Shell Gas Lanka Ltd, Walter Sanchez or any other official was not available for comments.
The Bottom Line also learns that Shell Gas Distributors’ Association is planning to hold a press conference next week to communicate the matter to the media.
Analysts say that Royal Dutch Shell is exiting from its core business LPG, in Asia and some South American Countries with a view of investing its money in oil drilling in some identified locations.
However, many ventures which Royal Dutch Shell had started during last decade has been shut down from time to time globally such as its solar energy and renewable energy projects.
“Shell asked us to expand our operations in the country last year or to ‘step down’ from business if we did not have the capacity to expand from our own investments. So we had to generate funds through various ways. They were using our money to build their brand at no cost without revealing us their exit strategy. There abrupt exit will cost us serious losses,” said an official from Shell Gas Lanka’s distributors.
According to the distributors, Royal Dutch Shell PLC has encouraged its 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 of Shell Gas Lanka Limited.
The official also said that each of the distributors had to invest nearly Rs.40 million to upgrade and expand their operations as requested by Shell Gas Lanka.
According to him, the sale of Shell Gas Lanka would result in for them to lose the backing of a strong brand and hindering of credit lines.
He said that they are not asking for the whole Rs40 million afforded by each of them but at least some reasonable compensation. However since the negotiations are happening at the moment he refused to give us further comments on the matter.
There are around 30 Shell gas distributors islandwide.
However, neither the present country manager of Shell Gas Lanka Ltd, Walter Sanchez or any other official was not available for comments.
The Bottom Line also learns that Shell Gas Distributors’ Association is planning to hold a press conference next week to communicate the matter to the media.
Analysts say that Royal Dutch Shell is exiting from its core business LPG, in Asia and some South American Countries with a view of investing its money in oil drilling in some identified locations.
However, many ventures which Royal Dutch Shell had started during last decade has been shut down from time to time globally such as its solar energy and renewable energy projects.
