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Wait awhile for fuel price formula – Minister
View(s):The proposed pricing formula for fuel reflecting costs has been postponed again. Petroleum and Petroleum Gas Minister Chandima Weerakkody said the relevant Cabinet paper was taken up this week but was put off as the Ministry of Finance wanted time to study it.
“We will take it up next week,” he said. The formula, which will see price of fuel being aligned to world market rates, has been postponed several times in the past few months.
Meanwhile, the price of oil in the international market continues to tumble. On Friday, oil prices tumbled briefly below US$30 a barrel. Prices in Sri Lanka are still not reflective of these changes.
“One thing is we are still selling what was purchased in about October, or even prior to that,” said Minister Weerakkody. “So the changes in the world market prices are not reflected immediately.
Anyway we will be deciding on a transparent policy on fuel prices as per the Cabinet paper which will be taken up next week.”
According to Treasury data, the CPC sells a litre of petrol at Rs. 117 while it costs the corporation Rs. 113.39 inclusive of a tax of Rs. 64.40 a litre.
Diesel costs the corporation Rs. 79.88 a litre (inclusive of a tax of Rs. 28.02 a litre) while the selling price is Rs. 95 a litre. In both cases, there is a small profit in addition to the tax revenue to the Government.
Officials conceded that the Government, instead of reducing prices and passing on the benefits to consumers, sees this as an opportunity to collect more tax revenue from fuel sales and recoup past losses.