By a special correspondent
This analytical piece examines the controversial decision by Sri Lanka to award its 2026 Liquefied Petroleum Gas (LPG) supply contract to Switzerland-based Geo Gas Trading SA. The core speculation is whether this procurement—which involves Geo Gas sourcing a significant amount of its LPG from the United States—was a calculated geopolitical move. The timing is critical, coinciding with Colombo's sensitive negotiations with Washington to secure favourable terms in the 2025 US tariff reset. While officially a standard tender, analysts suggest the procurement could be a "goodwill gesture" demonstrating reciprocal economic engagement, aimed at securing crucial tariff concessions. The article highlights concerns over Geo Gas's limited track record in Asian markets and calls for greater transparency, especially given Litro’s history of controversial procurement decisions.Sri Lanka’s decision to award its 2026 liquefied petroleum gas (LPG) supply contract to Switzerland-based Geo Gas Trading SA has raised a wave of speculation far beyond the energy sector.
Officially, it was a standard international procurement exercise. Unofficially, analysts are asking whether the choice reflects deeper geopolitical calculations especially Colombo’s recent efforts to secure substantial relief under the 2025 US tariff reset, which initially threatened to push Sri Lankan exports into a 44% levy bracket before negotiations brought it down to 20%.
The contract, approved by the Cabinet, locks in the supply of 380,000 metric tonnes of LPG (±20%) for 2026.
What makes the deal unusual is that Geo Gas sources a significant share of its LPG from the United States, while the company itself remains comparatively new to Sri Lanka’s energy-trading landscape.
Litro Chairman Channa Gunawardana confirmed that the state-run firm is partnering with Geo Gas for the first time a decision that has immediately triggered scrutiny.
A Tender or a Trade Signal?
The timing has not gone unnoticed. The tariff negotiations with Washington unfolded just months before the tender closed.
While the Sri Lankan Government has not acknowledged any formal link between the LPG procurement and bilateral trade discussions, industry insiders argue that aligning with a US-sourced supplier even through a Swiss intermediary may have been interpreted as a goodwill gesture toward the US administration.
Trade analysts note that Washington has increasingly pushed for “reciprocal economic engagement” from developing economies seeking tariff concessions.
Procuring US-origin LPG, they say, may have offered Colombo an opportunity to demonstrate alignment with American energy corridors at a time when tariff relief was a priority.
Five Bidders, Two Survivors and Many Questions
The tender drew five international bids, but only two companies cleared the technical evaluation stage before Geo Gas emerged the winner.
According to procurement documents, the technical assessment covered product quality, adherence to updated LPG specifications, shipping frequency, financial stability, and the ability to meet Sri Lanka’s strict 12-month supply schedule beginning January 2026.
However, critics argue that Geo Gas Trading SA’s thin visible track record raises legitimate questions.
The firm is not widely known for supplying large-volume LPG contracts to Asian markets. Its presence in Sri Lanka is new, and its long-term reliability in servicing state-level clients remains untested.
Shadow of Past Procurement Controversies
Litro’s tender decisions have previously sparked controversy. In 2023, the National Audit Office flagged anomalies in LPG procurement after a tender initially awarded to the lowest bidder was later abandoned.
Given this history, many observers believe the latest decision warrants even greater transparency especially as three bidders were disqualified at the technical stage without detailed public explanation.
A Strategic Shift or a One-Off Decision?
As Geo Gas prepares to take over the country’s household LPG supply for 2026, the real test will lie in consistent deliveries, price stability, and compliance with updated safety and quality benchmarks.
However, beyond the commercial dimension, this tender may also offer a glimpse into a broader strategic tilt in Sri Lanka’s trade and geopolitical positioning.
Whether the decision reflects a tactical nod toward US interests or simply the outcome of competitive pricing and technical suitability remains a question that only time, and the performance of the supplier, will answer.