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CPC losses fuel petrol price hike
View(s):Recurring losses by the state-owned Ceylon Petroleum Corporation (CPC) were the cause for the increase in the price of litre of petrol from Rs. 149 to Rs. 159, Petroleum Industries Minister Susil Premajayantha claimed yesterday.
“We are unable to continue with the losses as the CPC is in debt to state banks and has been compelled to pay high interest rates. Therefore, we have decided to increase the price of petrol to minimise the losses’, he said.The minister said the losses were largely because non-payment of Rs. 100 billion owed to the CPC by state institutions with the Ceylon Electricity Board accounting for half of those dues.
Mr. Premajayantha said that to reduce the losses, the CPC would increase the price of furnace oil supplied to the CEB for thermal power generation.
CPC Managing Director L.E. Susantha Silva said they had no immediate plans to increase the prices of kerosene, diesel or 95 Octane petrol.
“If we increase everything, it will have a really bad impact on the economy,” he said. “However, we have to recoup at least part of our losses, though we continued to incur losses on diesel and kerosene sales. We bring diesel at Rs. 140 a litre but sell it at Rs. 115,” Mr. Silva said. “When we sold 90 Octane petrol at Rs. 149 a litre, we made a loss of Rs. 13 from each litre.
We stomached the loss for a while but we must mitigate the losses.” The CPC did not increase 95 octane petrol because only a small number of vehicle owners use it, Mr. Silva said. But he added that the CPC wanted to bridge the price gap between 90 Octane and 95 Octane which is sold at Rs. 167 to encourage vehicle users to switch to the more efficient and environment-friendly higher octane fuel.
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