CPC losses Rs. 75 b; petrol price hiked to record level

The Government increased the price of gasoline by 6.7% on Saturday to a record level to prevent State-run Ceylon Petroleum Corporation (Ceypetco) suffering further losses, an official said.

The price of a litre of gasoline was raised by Rs. 10 to Rs. 159 ($ 1.24), a record high level in terms of the local currency.

Ceypetco Managing Director Susantha Silva said the State-run firm’s losses stood at Rs. 75 billion ($ 583.43 million) at the end of October because of the failure to pass the world market oil price on to consumers.

Silva, however, said Ceypetco would still lose Rs. 5 a litre despite the price increase on Saturday.

Sri Lanka’s only private sector fuel retailer, Lanka IOC PLC, a subsidiary of Indian Oil Corporation Ltd., increased its gasoline price in line with the State-run firm.

In February, Sri Lanka raised the price of gasoline by 8.8%, diesel by 36.9%, and kerosene by 49.3% to reduce the losses and curb cheap imports in the wake of a falling rupee, which has depreciated more than 14% since then.

Sri Lanka also faces constraints in importing cheap crude oil from Iran in the face of sanctions on Iran imposed by the United States because of its nuclear program.

Sri Lanka’s only 50,000 barrel-per-day refinery is designed predominantly to refine Iranian light crude, though crudes from Oman and Saudi Arabia can also be refined at a lower refining efficiency.