Price hikes after Avurudu

While prices of New Year items have risen to their highest levels and beyond the reach of thousands of people this year, further post-Avurudu shocks are likely with fuel, domestic gas and milk food prices going up. Ceylon Petroleum Corporation Chairman Asantha De Mel said yesterday crude oil prices soared to $111 a barrel this week and the CPC would find it difficult to sell fuel at the current prices.

Mr. De Mel said the revision would be made after the New Year and he feared world prices would go up further in the coming days and weeks. According to the CPC, diesel should be sold at Rs. 91 a litre and kerosene at Rs. 85 if world market prices were applied. The CPC chairman said the CPC was selling petrol at Rs. 117 a litre – Rs. 18.50 more than the world market price to subsidise the prices of diesel and kerosene.

Meanwhile, Shell Finance Director Rimoe Saldin said they had sought approval from the Consumer Affairs Authority (CAA) to revise prices from next month. At present, the cost of a 12.5 kg cylinder of domestic gas is Rs. 1,749 and Shell had asked for a further increase of Rs. 128, he said.

Meanwhile officials of milk food companies also claimed they would have no option but to increase prices soon due to production shortages in various countries. Fonterra Brands Lanka (FBL) Managing Director Achyut Reddy said the current agreement with the government – which fixed the maximum price of milk food at Rs. 275 for a 400 gram pack – expired on April 30.He indicated that prices would need to be increased by about 20 percent because of increases in world market prices.

Lanka Milk Foods Ltd (LMF) Marketing Director Marketing Lal Sarnapala said there would be no immediate increase in the price of Lakspray as they would not be importing new stocks for some time. He said the company was also concerned that consumption had dropped by 10 to 15 percent in recent weeks due to rising prices.

Countering these claims, Trade Ministry Secretary R.M.K. Ratnayake said that though world prices were increasing most local companies were selling dried milk dust which other countries did not even consume, but instead use fresh milk.