ECONOMYNEXT – Sri Lanka’s state-run fuel retailer Ceylon Petroleum Corporation (CPC) is earning 45-50 rupees from each litre of petrol at the moment as the second largest loss-making state-owned enterprise is looking for some recovery in the past losses, Energy Minister Kanchana Wijesekera said.
The Minister revealed this at a forum that discussed the challenges and opportunities in the island nation’s petroleum sector.
“The CPC is earning 45-50 rupees of profit from each liter of petrol now. We have to recover some past losses,” Wijesekera told the forum organized by Sri Lanka branch of German-based Friedrich Naumann Foundation later on Thursday (01).
Wijesekera reintroduced pricing formula in June this year after the CPC was deprived of US dollars to import any fuel. The fuel shortage led to street protests and continued until early this month. Both former president Gotabaya Rajapaksa and his brother ex-prime minister Mahinda Rajapaksa were compelled to resign from their post amid heavy protests.
Under the pricing formula, the prices were reduced once early in July by 20 rupees, but have maintained the high price since June this year despite there was a drop in global oil prices.
A top government official who has been working on economic reform has told Economy Next that the government will recover the losses through including it in fuel pricing formula and the similar practice will be followed in addressing the losses by the state-run Ceylon Electricity Board and Srilankan Airlines.
Wijesekera told Economy Next that including the losses in to fuel pricing formula needs cabinet approval and the approval process has already begun.
Selling at subsidized rates, rupee depreciation, dues from government-owned institutes and overpaid, inefficient and bloated staffing have been the prominent reasons for the past losses. The losses have accumulated to around 700 billion rupees (nearly $2 billion). (Colombo/Sept02/2022)