Decision on CPC fuel prices on Tuesday | Sunday Observer

Decision on CPC fuel prices on Tuesday

8 July, 2018

The decision on whether to revise fuel prices of State-owned fuel retailer, Ceylon Petroleum Corporation (CPC) based on the Cabinet-approved cost-reflective fuel price formula is likely to be taken up on Tuesday at the Cabinet meeting, highly placed sources told the Sunday Observer yesterday.

Although the Finance Ministry on July 5 announced a revision to fuel prices to take effect from midnight on July 6 to be applicable to the CPC and private fuel retailer, Lanka Indian Oil Corporation, the CPC, however, reversed the price hike in the morning of July 6 by issuing a circular to all Ceypetco fuel stations.

The situation has now resulted in Lanka Indian Oil Corporation hiking prices in line with the Finance Ministry’s directive and the CPC retailing fuel at the previous rates.

“The decision to revise prices was taken on June 5 by the committee appointed to evaluate the price according to the prices of the last two months. At this meeting, there was consensus among all members including several senior officials of CPC. But, I don’t know why CPC has since not complied with the decision,” governmental sources told the Sunday Observer.

On May 11 this year, the Finance Ministry obtained Cabinet approval to introduce the fuel pricing formula along with the implementation of a subsidy scheme for vulnerable groups such as fishermen.

The Sunday Observer at the time had reported the decision in an article published on May 13, 2018 under the headline ‘Next review of formula-based fuel price on July 5’.

Subsequently at the end of June, the Cabinet approved a paper presented by Finance Minister Mangala Samaraweera to appoint a committee with members from the Treasury and Petroleum Resources Ministry to evaluate the price according to the prices of the previous two months.

“Given that the Finance Ministry has the authority to decide the fuel price and all due procedure was followed in arriving at the decision, there cannot be a technical reason why the CPC is not complying with it. Remember it is a Cabinet approved committee deciding the price under the formula,” the source said on condition of anonymity.

Several attempts by the Sunday Observer to contact the Minister of Petroleum Resources Development, Arjuna Ranatunga, Chairman of Ceylon Petroleum Corporation, Dhammika Ranathunga and Managing Director of Ceylon Petroleum Storage Terminals Limited, Sanjeewa Wijeratne yesterday proved futile, as none of them responded to telephone calls.

Secretary to the Ministry of Petroleum Resources Development, Upali Marasinghe, however, replied to a phone with a text message, which read: ‘Fuel prices determined by the Ministry of Finance’.