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Sharp increases in fuel prices after Avurudu
The refusal by the Treasury to remove taxes on fuel will see sharp increases in fuel prices after the National New Year. These increases will be based on fluctuating world market prices, officials said. A senior Finance Ministry official said it was set to approve a new pricing formula for fuel. This would mean that prices would be reviewed two to three times a year and adjusted according to international market prices.
On Wednesday the Treasury rejected an appeal from the Petroleum Resources Development Ministry to remove taxes on fuel to improve the financial situation of the loss-making Ceylon Petroleum Corporation (CPC). The Petroleum Ministry has urged the Treasury to either remove taxes on fuel or provide a pricing formula as the last revision of fuel prices had been made more than three years ago.
“We have asked for a solution from the Treasury as the current fuel prices were fixed at a time when the international prices were about US$ 40 a barrel. At present the price is about US$ 69 a barrel,” Petroleum Ministry Secretary Upali Marasinghe said. From January to February this year, the CPC suffered a total loss of Rs 9.8 billion by selling petrol, diesel and kerosene at subsidised prices. The biggest loss was in the supply of Lanka Auto Diesel – Rs 4.3 billion, followed by Petrol 92 – Rs 2.9 billion and Kerosene — Rs 2.1 billion. The Treasury official confirmed that the proposal to remove the taxes was rejected, because the burden could not be taken over by the state.
“We will be compelled to take a decision regarding the issue after the New Year and introduce a pricing formula as a possible solution,” the official explained.
The CPC’s losses have been on the rise after the Lanka Indian Oil Company (LIOC) increased fuel prices three weeks ago. “We now handle about 80 percent of the market share after the LIOC increased its prices,” Mr Marasinghe said.
A key CPC trade union leader has called for discussions with the Treasury and the Petroleum Ministry to seek the removal of taxes on at least the locally refined petroleum products, as the daily overall loss of the CPC was now around Rs 140 million. By Damith Wickremasekara The refusal by the Treasury to remove taxes on fuel will see sharp increases in fuel prices after the National New Year.
These increases will be based on fluctuating world market prices, officials said. A senior Finance Ministry official said it was set to approve a new pricing formula for fuel. This would mean that prices would be reviewed two to three times a year and adjusted according to international market prices. On Wednesday the Treasury rejected an appeal from the Petroleum Resources Development Ministry to remove taxes on fuel to improve the financial situation of the loss-making Ceylon Petroleum Corporation (CPC).
The Petroleum Ministry has urged the Treasury to either remove taxes on fuel or provide a pricing formula as the last revision of fuel prices had been made more than three years ago. “We have asked for a solution from the Treasury as the current fuel prices were fixed at a time when the international prices were about US$ 40 a barrel. At present the price is about US$ 69 a barrel,” Petroleum Ministry Secretary Upali Marasinghe said.
From January to February this year, the CPC suffered a total loss of Rs 9.8 billion by selling petrol, diesel and kerosene at subsidised prices. The biggest loss was in the supply of Lanka Auto Diesel – Rs 4.3 billion, followed by Petrol 92 – Rs 2.9 billion and Kerosene — Rs 2.1 billion. The Treasury official confirmed that the proposal to remove the taxes was rejected, because the burden could not be taken over by the state.
“We will be compelled to take a decision regarding the issue after the New Year and introduce a pricing formula as a possible solution,” the official explained.
The CPC’s losses have been on the rise after the Lanka Indian Oil Company (LIOC) increased fuel prices three weeks ago. “We now handle about 80 percent of the market share after the LIOC increased its prices,” Mr Marasinghe said.
A key CPC trade union leader has called for discussions with the Treasury and the Petroleum Ministry to seek the removal of taxes on at least the locally refined petroleum products, as the daily overall loss of the CPC was now around Rs 140 million.