Sri Lankan Fuel prices to shoot up within three weeks

May 3 (IL) Local prices of petrol and diesel are very likely to shoot up within the next three weeks. However the Government is unlikely to increase the price of kerosene despite the Ceylon Petroleum Corporation losing nearly Rs. 35 per every litre sold.

Corporation Chairman Jaliya Medagama said the percentage of the increase would be decided within the coming week. He pointed out that the CPC had incurred a Rs. 3.7 billion loss for April alone due to the non-adjustment of fuel prices according to world prices.

The last price hike of fuel was in September last year when a barrel of oil was sold at US dollars 45 in the world market. According to early April statistics, the Corporation was losing Rs. 15 per every litre of petrol and Rs. 20 per every litre of diesel sold.

Since the UPFA Government came to power in April last year, the price of kerosene has not been increased, as it considered kerosene to be a 'basic need of the poor man'.

The Central Bank has also on numerous occasions urged the Government to increase the fuel prices in accordance with world prices. However sources alleged due to obvious 'political reasons' the Government on many a occasion postponed the price revisions.

"Adjusting domestic fuel prices to reflect international oil prices will promote the use of fuel efficiently and economically, having a positive impact on the balance of payments," the Bank said early last month. A litre of petrol in Sri Lanka is currently sold at Rs. 68, while diesel is priced at Rs. 42. A litre of kerosene is sold at Rs. 26.50.

The Government refrained from increasing the local oil prices even when the price of a barrel of crude oil in the world market shot up last month to its highest ever, crossing the US dollar 58 mark, claiming it did not want to 'burden the masses'. Currently a barrel of oil is sold at a little over US dollars 54.