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Sri Lanka state retailer delays formula price hike; LIOC allowed to go ahead

Jul 06, 2018 19:24 PM GMT+0530 | 2 Comment(s)

ECONOMYNEXT - Sri Lanka's finance ministry said the state fuel distributor is delaying a price hike under a formula until next week, amid queries in parlaiment whether President Maithripala Sirisena had thrown a money wrench into the reform.

In Sri Lanka, state-run Ceylon Petroleum Corporation and Lanka IOC, a publicly traded company distributes fuel.

The finance minsitry said a committee which is empowered to decide the price under the formula had sat on July 05, and decided on the hikes.

"Therefore petroleum distributors can change their retail prices based on these tariffs," the Finance Ministry statement said.

"The decision on changing the prices of CPC (retailers) will be decided at the cabinet meeting."

Opposition legislators raised questions in parliament Friday whether President Maithripala Sirisena had arbitrarily obstructed the move and whether the cabinet approval had been gained to reverse it.

The cabinet already formally decided to allow a committee to price fuel by formula after long deliberations. Automatic fuel pricing is a key reform long called for by economists to bring economic stability back.

The finance ministry did not say whether the President or Petroleum Minister had opposed the reform. (Colombo/July06/2018)


 

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2 Comments

  1. Tilak July 08, 06:31 AM

    Garbage in garbage out principle works when ever non relevant costs such as the cost of the huge outstanding amounts to CPC(principal +holding costs) is charged to the formula or if any cost of inefficiencies in crude oil procurement,conversion,or distribution is reckoned as normal cost of production in the formula that determine the selling prices the formula will only legitimize charging additional costs on account of buying Muk,or procurement at non optimal prices,or inefficiencies in conversion distribution to the final consumers as discussed fo decades.
    In such an event the formula will only warm the hearts of few who can be benefited out by burdening the public the economy non of the intended benefits would accrue to the country.
    LIOC which is a competitor but bound to be operated as an business entity that will not have the burden of some of the above mentioned non relevant costs is bound to have lower cost structures too could be a passive beneficiary too.

  2. Nana July 06, 07:31 AM

    If this formula was in effect, people would have got Petrol for Rs. 75 some time back. Instead we were paying Rs. 117. Also CPC cant be claiming losses. They will have to be be responsible. JVP and vote minded politicians and fool citizens in this banana republic cant understand this..

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