Fuel formula ‘U’ turn brings down all time high petroleum tariffs
In a significant ‘U’ turn, the Government has reintroduced the fuel price formula devised by the Treasury under the then finance minister Mangala Samaraweera in 2018 bereft of politicisation on the directions of President Ranil Wickremesinghe.
This adoption of the automatic fuel price adjustment mechanism monthly has revised the existing steep price increase, Finance Ministry sources said adding that this was one of the commitments made by the Government to the IMF to get the US$2.9 billion bailout loan.
Accordingly, Octane 92 petrol has been reduced by Rs. 60, Octane 95 petrol by Rs. 135, Auto Diesel by Rs. 80, Super Diesel by Rs. 45 and Kerosene by Rs. 10 per litre.
The new prices are Octane 92 petrol Rs. 340, Octane 95 petrol Rs. 375, Auto diesel Rs. 325, Super diesel Rs. 465 and Kerosene Rs. 295.
The high price increase was introduced in February in accordance with a new formula replacing an earlier formula which included costs related to unloading, taxation, production, operational and administration cost as well as profit margin, and contribution to the fuel price stabilisation fund.
However, profits and contribution to the fuel price stabilisation fund have not been calculated in raising the fuel price at that time, a senior Ministry official told the Business Times
This was the second fuel price hike since April 19, 2022 and it was brought down under the present fuel price formula introduced this week.
A special committee headed by Deputy Secretary to the Finance Ministry and representatives of the President, Prime Minister, Ministry of Petroleum Resources, and the Finance Ministry has been entrusted to revise the fuel price monthly.
The fuel pricing model is mainly based on Singapore FOB price (US$/bbl) + freight/loss/insurance (US$/bbl) which is the CIF price ($/bbl) and currency exchange rate (Rs/ $)/litres per bbl equivalent to CIF price (Rs /litre).
One barrel of crude oil contains about 160 litres of oil priced in US dollars. To calculate the price, US dollars are converted to Sri Lankan rupees and then divided by 160.
The landed cost (jetty pipeline charges, +port development levy +LC charge), taxes (excise duty, customs duty, and other levies including VAT), CPC/ LIOC finance charges, CPC/, LIOC wholesale costs, CPC /LIOC margin, Marketing/ distribution costs and, dealer discounts are the other factors contributing to the determination of consumer retail price.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!