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CPC to raise fuel prices

Contradictory claims by Fowzie and LIOC

By Malik Gunatilleke

Ceylon Petroleum Corporation (CPC) fuel prices will be increased shortly, Petroleum Minister A.H.M Fowzie said yesterday.

“We have lost 1,750 million rupees within the year because of the subsidized rate at which we sell fuel. We will have to increase the fuel prices again shortly,” Mr. Fowzie said.

The minister declined to say whether the CPC prices were to be brought on par with the Lanka Indian Oil Company (LIOC) prices which are currently higher, but other CPC sources said the increase was aimed at bringing both prices to the same level.

Mr. Fowzie said, “there is no agreement or understanding with the LIOC on matching CPC prices with LIOC prices. We will raise CPC prices to reduce government losses”.

But an LIOC official told a different story.

LIOC Managing Director K. Ramakrishnan said the government allowed LIOC to fix its own fuel prices to cover losses because the government could not afford to pay the subsidy and as a result LIOC raised its petrol prices by 5 rupees a litre.

He said despite the increase, the LIOC continued to lose Rs. 7 a litre in terms of world market price.

At present, LIOC petrol is sold at Rs. 98 and a litre and CPC petrol at Rs. 96 while LIOC diesel is sold at Rs. 66 a litre and CPC diesel at Rs. 64.

Mr. Ramakrishnan claimed that the price difference had resulted in a drop of 50 per cent in LIOC sales.

“We cannot survive if CPC does not increase its prices because most people won’t buy petrol at 2 rupees higher. We have an understanding with the government and we have got an assurance CPC prices also will be increased so that we will not suffer a sales loss,” Mr. Ramakrishnan said.

Meanwhile, two grenades exploded in LIOC sheds in Piliyandala and Kirillawala a week ago injuring one custormer. Early Thursday, two more grenades were found in LIOC sheds in Mount Lavinia and Kadawatha.

Mr. Ramakrishnan said LIOC was not worried about a possible consumer boycott of LIOC sheds in view of the grenade incidents.He said LIOC was taking extra security measures at its filling stations and offices.

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