Post-budget shock

By Shelani Perera

Consumers reeling under the recent price hikes of flour, bread and milk powder face a post-budget shock with electricity rates likely to go up early next year. Ceylon Electricity Board Chairman Udayasiri Kariyawasam said crude oil price hikes had made it essential for the CEB to raise rates and proposals to this effect would be submitted to the cabinet. He said 65 percent of the CEB power generation was by fuel-based thermal power and the CEB was running at a loss of Rs. 2 per every unit supplied.

Meanwhile, the country’s oil rivals have said they were incurring losses, indicating a price revision was in the offing. With crude oil prices hitting an all-time record of US$96 per barrel last week, the Ceylon Petroleum Corporation said it had run up a massive loss of more than Rs.2,000 million last month, while the rival Lanka Indian Oil Company claimed it posted a loss of more than Rs120 million in the same period.

LIOC Managing Director K. Ramakrishnan said they were losing Rs.12 on a litre of diesel and Rs. 6 on a litre of petrol. Petroleum Minister A.H.M. Fouzie said the CPC’s loss on petrol was not that high, but on diesel the corporation was losing as much as Rs13 per litre. “We sell about 145 million gallons of diesel per month so one can imagine the loss that we have to shoulder”, he said.