The Government has decided to put off a price hike by Ceylon Petroleum Corporation despite recommendation by Energy Minister Udaya Gammanpila, State Utilities Chairman as well as Central Bank.
At the special Cabinet meeting held, the Government has decided not to raise fuel prices Minister Mahinda Amaraweera said.
“At today’s special cabinet meeting it was decided not to revise fuel prices. The President also instructed officials to take steps to ensure a continuous supply of fuel,†he said.
In addition, the Ministry of Finance has agreed to repay the Rs. 80 billion debt owed by the Ceylon Electricity Board to the CPC for fuel, the Minister added.
“The price of a barrel of fuel in the international market has gone up, but considering the situation of the people, we have decided not to increase the price of fuel,†Amaraweera said.
The President convened the special cabinet meeting to discuss the fuel and consequent energy crises.
“Sri Lanka’s fuel price revision is now long overdue and petrol and diesel pump-prices are in some instance less than half of some countries in the region,†tweeted CBSL Governor Ajith Nivard Cabraal on Sunday with a table listing comparative fuel prices.
Energy Minister Udaya Gammanpila last Friday said he had made a written request from Finance Minister Basil Rajapaksa to remove the taxes imposed on imported fuel and to increase prices.
“The request was made after considering the difficulties faced in carrying out operations at the Ceylon Petroleum Corporation (CPC), and its continuous loss-making streak,†he told journalists.
He said the world crude prices have increased to an all-time high of $ 19,286 per barrel, adding that the Finance Ministry has been informed on the rising world oil market situation, but the Ministry is yet to respond.
As per the data shared, the CPC at present suffers a loss of Rs. 551 million monthly on top of Rs. 83 billion last year.
The Minister noted that the CPC pays tax of Rs. 42 is imposed on a litre of 92 Octane Petrol, Rs. 64 on 95 Octane Petrol, Rs. 17 on diesel and Rs. 39 on Super Diesel. Thereby, the Treasury receives Rs. 368 million on a daily basis as taxes from the CPC.
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An increase will further dent the economy to a new low