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Oil shock: Steep price hike; relief for key sectors
View(s):By Damith Wickremasekera
The Ceylon Petroleum Corporation (CPC) effected a sharp fuel price revision from midnight yesterday, marking the second increase in less than two weeks as international oil prices soared.
The increase was also the biggest price revision after the country’s economic crisis in the 2022/23 period.
Accordingly, the price of a litre of Octane 92 petrol has been increased by Rs 81 from Rs 317 to Rs 398. Octane 95 has been increased by Rs 90 from Rs 365 to Rs 455 per litre. The Lanka Auto Diesel price has been increased by Rs 79 from Rs 303 to Rs 382 per litre. The Lanka Super Diesel price has been increased by Rs 90 from 353 to Rs 443 per litre. Kerosene has been increased by Rs 60 from Rs 195 to Rs 255 per litre.
Petrol and diesel prices were last revised on March 9, with the Octane 92 price being increased by Rs 24 per litre while Octane 95 was increased by Rs 25 per litre.
The Auto Diesel price went up by Rs 22 per litre, while the Super Diesel price was increased by Rs 24 per litre. Kerosene was increased by Rs 13 per litre.
Hours before yesterday’s price revision, the government increased the weekly fuel quota issued for vehicles. Please see the story on Page 6.
Meanwhile, the government was considering providing subsidies to essential sectors as well as targeted groups to cushion the impact of a price revision, a senior government official said.
Dealers such as Sinopec and RM Park Shell, which control around 43% of the market share, had demanded a price hike in the wake of the rise in global oil prices, with Brent crude currently trading at over US$110 a barrel.
The official said fuel would be issued at subsidised rates to essential sectors such as health and targeted communities such as tho
se engaged in farming, fishing, the hotel sector, industries and low-income groups.
“What is unfolding is beyond our control, but we have to ensure that price hikes don’t affect the most vulnerable in society and impede essential services,” he said.
He said the International Monetary Fund (IMF) also has agreed to the subsidy for targeted communities. Further discussion on the matter will be held when an IMF team visits Sri Lanka from March 26 to April 9 in relation to the combined fifth and sixth review of the Extended Fund Facility (EFF)-supported programme.
Foreign Minister Vijitha Herath said that while the government would grant subsidies, there would be no reduction in the Value Added Tax (VAT) or other taxes levied on fuel dealers. The government would instead discuss any other relief measures that could be offered to them to keep prices stable, he said.
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