Sri Lankan fuel prices set to increase

The price of fuel (petrol and diesel) is to be increased following the decision taken to make spot purchases by the Ceylon Petroleum Corporation (CPC) to avert the current fuel crisis as a result of the delay of a 40,000 MT shipment ordered by the corporation, official sources said.  
The fuel crisis emerged after a shipment of petrol imported by the Lanka Indian Oil Company (LIOC) failed to meet the required specifications and was rejected by the CPC. The CPC is to make emergency purchase of 85,000 barrels of petrol through spot purchases to tackle the crisis and it has no alternative other than the increasing of fuel prices.
Although Petroleum Resources Minister Arjuna Ranatunge has made a statement in parliament stating that the price of fuel will not be increased under the present shortage of petrol, the CPC’s decision to go for spot purchasing will compel the government to raise fuel prices, the sources said.
In a recent letter to the Prime Minister, Lanka IOC has also urged to increase fuel prices as they are incurring heavy losses by selling fuel at subsidised prices.
The CPC used to operate on spot purchases and long term tenders when purchasing fuel. When the IOC shipment was rejected, and it has immediately called for a spot tender, Ministry of Petroleum Resources Development official said.
TimesOnline reliably learns that the ministry has sought the permission to increase fuel prices to tackle the crisis situation arisen due to fuel shortage and panic buying. (Bandula)