COLOMBO (EconomyNext) – Sri Lanka’s government said it will maintain current fuel prices despite the upturn in international oil prices but was working towards introducing a pricing formula that would change in tune with global oil price fluctuations.
”The fuel pricing formula is now being worked out and will be put before the cabinet of ministers soon,” Minister of Power and Energy Patali Champika Ranawaka said.
“But even before introducing the formula we want to ensure we operate the Ceylon Petroleum Corporation without losses in future.”
The state-run CPC, which operates the island’s sole crude oil refinery, can still maintain its current fuel retail prices despite the upturn in international oil prices in recent weeks, Ranawaka told a news conference when asked if they were considering a price hike.
The government sharply reduced fuel prices in January soon after it was formed following the presidential polls.
Rumours of a fuel price hike and that the CPC is to be privatised because of heavy losses were false and spread by the government’s political enemies, Ranawaka said.
The government is considering introducing a fuel pricing formula linked to electricity tariffs or one that would change prices every three months based on global prices.
“One proposal is to link the fuel pricing formula to electricity tariffs because 10-12 percent of electricity is generated through fuel, especially power plants using heavy fuel oil,” Ranawaka said.
“Electricity tariffs are revised twice a year, in April and October.
“The second proposal is to revise fuel prices every three months after evaluating world prices,” Ranawaka said.
“We will have a transparent fuel pricing formula but not like India’s open, liberalised energy market. It will be a regulated, people-friendly market.
India has an open market with electricity prices changing all the time.
“We can do that but it may affect our industries and domestic consumers,” Ranawaka said. “In Sri Lanka we’ll have a regulated, state-run type of system to protect the poor and low consumption people.”