Minister clarifies CPC fuel costs amid price revision

Tuesday, 2 April 2024 02:01 - - {{hitsCtrl.values.hits}}

Cites refinery costs, VAT, refinery gains or losses as factors influencing prices
Says pricing formula allows for maximum profit of 4% on all products except kerosene
Asserts US dollar rates calculated based on average monthly purchase rates
Reveals gains or losses from other products cannot be transferred, as cost-reflective pricing formula applies to each product individually

Power and Energy Minister Kanchana Wijesekera yesterday shed light on the particulars of the Ceylon Petroleum Corporation’s (CPC) fuel costs, following the recent fuel price revision announced on Sunday.

In a comprehensive 6-point statement shared via ‘X’, he provided insights into the factors influencing the decision not to reduce the prices of 92 Octane Petrol and Auto Diesel.

Wijesekera highlighted the significant impact of refinery costs on Auto Diesel, 92 Octane Petrol and Kerosene. He pointed out that the application of Value Added Tax (VAT) on refinery products since 1 January has further compounded the pricing dynamics.

“Refinery gains and losses are calculated on the above products. The refinery does not produce Super Diesel or 95 Petrol,” he added.

He also noted that the price formula allows for a maximum profit margin of 4% on all products. However, he noted that full profit margins are not applied to Auto Diesel and 92 Octane Petrol to maintain stable prices. Wijesekera cautioned that applying the full 4% profit margin would necessitate a price increase for these products. He said profit margins are not applied to Kerosene.

In addition to outlining pricing principles, Minister Wijesekera noted the calculation of US dollar rates, based on the average monthly rate of actual purchases during the respective month. He underscored that gains or losses from other products cannot be transferred to different products, stressing the application of a cost-reflective pricing formula to each product individually.

Litro reduces gas prices

Litro Gas Chairman Muditha Peiris announced that the price of its domestic LP gas cylinders have been slashed with effect from yesterday.

Accordingly, the price of the 12.5 kg cylinder has been reduced by Rs. 135 to Rs. 4,115 whilst the price of the 5 kg cylinder has been reduced by Rs. 55 to Rs. 1,652. The price of the 2.3 kg cylinder has been reduced by Rs. 23 with the new price of Rs. 772.