in global prices
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
"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
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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