Oil hits US$ 125: CPC mulls price revision

By Malik Gunatilleke

The government will assess the world market crude oil prices within the next few days and discuss any further increases on domestic prices, as the world market price reached a record level of US $126 a barrel, an official said yesterday.

The Ceylon Petroleum Corporation has incurred losses of around Rs.7 billion since its last price revision in January and is now discussing how to handle a further international crude oil price hike of nearly US$30 in four months, its chairman Asantha de Mel said.

Mr. de Mel said no decision had been taken yet on a price revision but discussions were underway. Meanwhile, the one billion dollar Iranian-funded Sapugaskanda refinery expansion project is due to begin within the next two to three months and is expected to be completed in about two years.

Mr. De Mel said that after the expansion the CPC would be able to refine 100,000 barrels of crude oil a day — the current requirement of the country. At present the refinery only refines 50,000 barrels a day.

Petroleum Minister A.H.M. Fowzie said that with the completion of the refinery project, local oil prices could be curtailed and import cost cut down.