President hints imminent fuel price hike

By Ajith Siriwardana and Yohan Perera

Colombo, March 21 (Daily Mirror) - President Anura Kumara Dissanayake yesterday stressed the need to increase fuel prices due to the escalating fuel prices in the world market, saying that if prices were not increased, fuel supply by the private sector would be affected.

The President told Parliament that the private sector contributes 43 per cent to the fuel market while the Ceylon Petroleum Corporation contributes only 53 per cent, and that if the private sector supply was stopped, the country's fuel supply would be affected.

He said fuel prices in the world market has gone up remarkably in the last few weeks, where prices of petrol-92 has gone up by 55 per cent between March 2 and 18, petrol 95 by 65 per cent, diesel by 74 per cent and crude oil by 40 per cent.

The President said according to the formula, a litre of fuel should be increased by Rs. 2 if world market prices surge by USD 1, adding that petrol 92 has gone up by USD 49 while diesel by USD 84.

He said Sri Lanka imported fuel on long-term tenders and that the premium has also gone up by USD 2.5 to USD 40.

"Fuel prices have been increased from 6 per cent to 50 per cent in most countries, whereas Sri Lanka has increased only by 8 per cent so far. If the CPC had full control of the fuel market, we could have managed the situation even at a loss. However, the private sector contributes 43 per cent of the fuel market. If their supply were interrupted, it would affect the fuel supply in the country. The private sector says that if prices are not increased, they cannot place orders for shipments. According to them, they incur a loss of USD 55 million for a shipment. We need to consider fuel prices very soon," he said.

He said if the private sector alone were allowed to increase the prices, there would be a gap of around Rs. 100 to Rs. 150 between the prices of the CPC and the private sector.

"If such a huge gap is there, consumers will be forced to come to CPC fuel stations," he said.

The President said the government is considering giving some relief in the next price hike, adding that discussions are being held on whether to provide relief to targeted groups or to everyone in general. "The issue is the practical difficulty in determining the targeted groups due to irregularity of the structure," he said.