CPC hoping not to raise prices

World fuel prices are higher today but the Ceylon Petroleum Corporation (CPC) is not raising prices here in the hope it would come down, says CPC Chairman Asantha De Mel.

"We feel the people can't be burdened too much so we will even take a little loss at this time." Normally, after October 6, the prices generally dip. A consistent pattern over the last six years shows that bottoming usually occurs in October and November with prices coming down in December and picking up again after. Currently, gas oil is around US$93 per barrel and Dubai crude oil prices are hovering at US$73 or US$74. De Mel added that in January 2007, the prices of gas oil and crude oil were US$62 and US$69 per barrel, respectively.

De Mel also said the CPC is engaged in several projects such as refinery expansion for which feasibility studies are currently being carried out. The CPC is also focusing on a pipeline project connecting the harbour with Kolonnawa and is trying to get into different areas such as bunkering and agrochemicals. The refinery expansion project is estimated to cost between US$700 and US$800, all of which the CPC is planning on financing on its own.

"We have a credible balance sheet," De Mel said. "The government has to allow us to move the price. We have spoken to them and they have given us assurances that we will be allowed to move it. We are hoping that once the price comes down, we can hedge 70% to 80% of our product." He explained it was a different way of financing which is linked to crude oil prices. However, he said that due to the politics, sometimes what is good the country is notgood for the politicians.