CPC awaits Treasury nod for another fuel price hike

By Malik Gunatilleke

The Ceylon Petroleum Corporation (CPC) is awaiting Treasury approval to increase fuel prices by Rs. 6, Chairman Asantha de Mel told The Sunday Times.

The move will push the price of petrol to Rs. 112 a litre and diesel to Rs.73 -- the fourth fuel price hike in about two months. Mr. de Mel said the CPC had no control over soaring world market prices and if price hikes were to be avoided, taxes would have to be reduced.

But Non-cabinet Finance Minister Ranjith Siyambalapitiya said the government was not in a position to reduce taxes. He said the government was, however, aware that big fuel price hikes would have serious consequences and result in a chain reaction in all sectors. Stressing that the Treasury had still not approved any fuel price hike, the minister said that he hoped that if a hike was necessary it would not be as high as Rs. 6 a litre.

Meanwhile, a spokesman for Lanka Indian Oil Company (LIOC) said they were hoping to increase prices by Rs.7 a litre to avoid losses. LIOC Managing Director K. Ramakrishnan said that his company had not earned much by way of profits in Sri Lanka and was under pressure from investors.

However, he said the LIOC hike would depend on the Treasury’s approval of the CPC price increase as his company would maintain the same pricing as the CPC to stay somewhat competitive in the market.

In an early reaction to the possible fuel price hikes, private bus operators said yesterday that if there were fresh hikes, they would be forced to increase fares by as much as 25 percent.

Meanwhile, Shell and Laugf gas companies have sought permission to increase the price of a 12.5 kg gas cylinder by Rs.123 and Rs. 80 respectively. On May 14 both companies raised gas prices by Rs. 20.