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  News

Despite sharp decline   in global prices

Govt. decides not to reduce fuel prices

By Mandana Ismail Abeywickrema

The government has decided not to reduce local fuel prices in line with the decline recorded in global fuel prices.

Petroleum and Petroleum Resources Minister A.H.M. Fowzie says that although the global market prices have seen a decline in prices, Sri Lanka was not in a position to reduce fuel prices as the new shipment was yet to reach the island.

"Global fuel prices have declined from US$ 91 to US$ 85, but we cannot reduce prices in Sri Lanka as the country is yet to get the new shipment and even when we do get the new shipment, the CPC will still incur losses," he said.

According to Fowzie, even if Sri Lanka purchased fuel at the reduced global market rate, the CPC would still incur a monthly loss of Rs. 650 million. The loss would be mainly due to the sale of diesel and kerosene at lower rates.

"We did not increase the prices of fuel for a period of six months and during that time the global prices saw a sharp increase. The losses incurred by the CPC were heavy at the time. The local fuel prices have now been increased partially, but there is still a loss on diesel and kerosene," he said.

After six months, the government increased fuel prices this month and said that even after the recent price hike, the CPC was still incurring a loss of Rs. 1.2 billion per month.

It was said that after increasing fuel prices, the CPC was incurring a loss of Rs. 10 on a litre of diesel and Rs. 23 on a litre of kerosene.

Fowzie said that due to the previous losses incurred by the CPC the government would not be in a position to offer immediate relief to the people where fuel prices were concerned, but said there was a possibility of reducing prices in a few months if the global prices continue to decline.

Meanwhile, coalition partner of the UPFA government, the JVP last week charged that the government was not interested in reducing the burdens of the people and was using the war as an excuse.

JVP General Secretary, Tilvin Silva told the media last week that although the government increased the burdens on the people when there was an increase in the global fuel prices, it does not make any effort to reduce local prices and relieve those burdens laid on the people when global fuel prices decline.

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