The government is considering the possibility of reducing fuel prices, after global oil prices last week dropped to their lowest level in 19 months. It is understood that the Ceylon Petroleum Corporation would be watching the global situation for a couple of days before it made a decision on price cuts.
Midweek, crude oil fell to US$59 per barrel, its lowest since March 2007.
A senior official at the corporation told The Sunday Times that prices could not be reduced on the basis of price variations over just a couple of days. “Global oil prices must stabilise before we can think of a price reduction,” he said.
A sharp depreciation of the rupee against the US dollar had eroded some of the gains from falling international crude oil prices, the official said, adding that the Ministry of Petroleum Resources would consider all these factors before revising prices. Sources say a presidential committee was expected to make a decision on fuel prices quite soon.
Lanka IOC managing director R. Ramakrishnan told The Sunday Times said his company would fall in line with the Ceylon Petroleum Corporation if the CPC reduced prices. He said Lanka IOC would find it difficult to bring down prices just yet because profits had dropped 83 percent to Rs. 109 million in the third quarter of this year, the result of high taxes on fuel imports.
He said Lanka IOC has bought 26,000 tonnes of refined fuel at US$144 a barrel. In September, the government imposed a tax of Rs. 15 on a litre of petrol and Rs. 10 on diesel. Lanka IOC has to pay taxes of up to Rs. 39.50 rupees per litre of petrol and Rs. 10 rupees per litre of diesel, he pointed out. | 
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