ECONOMYNEXT – Sri Lanka could reduce fuel prices after March if there is no unpredictable events or sharp depreciation in the rupee currency, State Energy Minister D V Chanaka said.
The government has raised prices in successive two months through February.
“Usually, global oil prices are expensive during December to April because of the Winter season in Europe where their usage is high, and the demand is also high. This is why you see some increases during this period,” Minister Chanaka told reporters at a media briefing in Colombo.
“We believe that after March as usually every year, there will be reduction in the global oil prices and Singapore PLATTS. Last year for instance, we were able to reduce the fuel prices across the board by around 100 rupees during that period.”
“We believe the situation will arise this year as well unless there is some special reasons. If that situation prevails, we can reduce the price sharply, but simultaneously the rupee factor also critical in this. Every time the rupee strengthens, there is a reduction is the fuel prices.”
If rupees go otherwise, then the prices also will be otherwise. But rupee has strengthened so far.”
In the wake of Sri Lanka’s worst currency crisis in decades, after several methods to control fuel queues and manage limited fuel stocks failed, authorities introduced the QR code system in a bid to ration fuel and reduce queues in 2022.
The country, which has yet to come out of its sovereign default, has now got rid of queues and QR codes and Chanaka said improved energy security has been the main reason.
He said Sri Lanka has already built up one month fuel stocks equivalent to $200 million and one-week foreign exchange reserves of $200 million to boost the island nation’s energy security after an unprecedented economic crisis.
He said the government also in the process of improving the fuel storage capacity by refurbishing the 20 unused oil tanks owned by state-held Ceylon Petroleum Corporation (CPC). (Colombo/Feb 08/2024)