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As rupee falls, CPC loses Rs. 17.5 b in three weeks
The depreciation of the rupee is pushing the Government’s fuel bill up, resulting in a loss of more than Rs 17.5 billion in less than three weeks to the Ceylon Petroleum Corporation (CPC), a senior official said. He said the losses had shot up because the CPC had obtained US dollar loans from two state banks – the People’s Bank and the Bank of Ceylon for the purchase of fuel. The loans amounted to US$ 2.5 billion.
“The CPC will continue to incur losses if the dollar keeps appreciating. There has been no proposal to take countermeasures to reduce the losses,” the official said.
He said that in addition, the CPC was suffering losses due to the increasing international fuel prices which are currently being passed on to the consumers through the pricing formula.
The comments came as the government declared that the current pricing formula will continue to remain and will be applied on October 10 again.
State Finance Minister Eran Wickremaratne confirmed that the pricing formula for fuel would remain unchanged. He said, however, if the depreciation of the rupee continued, thereby affecting the fuel imports, the Government would consider adjusting the taxes so that the burden is not passed on to the consumers.
He said if fuel prices kept increasing it would have an impact on other consumer items as well and raise transport costs.
“We will also be forced to take tough measures such as suspending the import of vehicles through duty-free permits for some time.