A major energy procurement shake-up has sparked controversy after Sri Lanka replaced its long-standing Omani LPG supplier with a Swiss company, raising questions over transparency, pricing, and energy security.
The Cabinet has approved the awarding of Sri Lanka’s 2026 liquefied petroleum gas supply contract to the Swiss-based company Geogas Trading S.A., marking a significant shift in the country’s LPG procurement strategy.
The contract covers the supply of 380,000 metric tons of LPG for 2026 and replaces the long-standing arrangement with OQ Trading, a government-owned Omani company that has supplied gas to Sri Lanka for over a decade.
The current Omani contract is set to expire at the end of this month.
Litro Gas Lanka Limited called for international tenders under the 2024 Procurement Guidelines, inviting between 50 and 60 global suppliers. While 20 companies collected bid documents, only five submitted final bids.
Following the technical evaluation process, three companies qualified: Switzerland’s Geo Gas, Greece’s Naftomar, and Oman’s OQ Trading.
Naftomar was disqualified after failing to submit required technical certificates from shipowners.
However, controversy emerged after Geo Gas was selected despite allegations that it too failed to submit proper ship ownership documentation.
Industry officials have raised concerns, with some claiming the selection process was unethical and legally questionable.
Responding to criticism, Litro Gas CEO Mahendra Gurusinghe stated that the Standing High-Level Procurement Committee had recommended Geo Gas as the Lowest Responsive Bidder, in line with government tender procedures.
OQ Trading appealed the decision to the Procurement Appeals Board, but the appeal was rejected.
The Cabinet subsequently approved the award to Geo Gas on December 2.
A senior Treasury official explained that the US$ 300 million annual contract was tendered internationally to secure a more competitive price amid Sri Lanka’s economic pressures.
He noted that Geo Gas offered a slightly lower price, which was a decisive factor.
Officials stressed that maintaining at least four continuously operating LPG vessels is critical to meeting daily gas demand and safeguarding national energy security, making supplier reliability a key concern going forward.
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